10th Parliament · 1st Session
The President (Senator the Hon. Sir John Newlands) took the chair at 3 p.m., and read prayers.
The following papers were presented : -
Seat of Government (Administration) Act - Third Annual Report of the Federal Capital Commission, for the period ended 30th June, 1927.
Ordered to be printed.
Defence Act - Regulations amended, &c. - Statutory Rules 1927, No. 138- No. 139.
Naval Defence Act - Regulation amended - Statutory Rules 1927, No. 137.
Scat of Government Acceptance Act and Scat of Government (Administration) Act-
Ordinance No. 20 of 1927 - Careless Use of Fire.
Papua Act - Ordinance No. 9 of 1927 - Supplementary Appropriation (No. 2) 1926-1927; together with Supplementary Estimates of Expenditure (No. 2) for the Year ending 30th June, 1927.
Lands Acquisition Act - Land Acquired at Narabeen, New South Wales - for Postal purposes.
[3.2]. - I lay on the table the third annual report of the Federal Capital Commission for the period ended 30th June, 1927, and move -
That the report be printed.
I do so because there may be no further opportunity for the Printing Committee to meet before Parliament adjourns, and this report is . one which honorable senators will no doubt desire to have as early as possible.
Question resolved in the affirmative.
International Economic Conference,
-Is it the intention of the Government to appoint a delegate to the International Economic Conference recently appointed by the Council of the League of Nations ?
– The matter is under the consideration of the Government, and a decision will be arrived at shortly.
– When does the Minister expect to be in a position to make an announcement regarding the decision of the Government in connexion with the report of the Public Accounts Committee dealing with shipping service between Tasmania and the mainland?
Senator Sir GEORGE PEARCE.I Hope to be in a position to make announcement before Parliament adjourns.
asked the Min ister representing the Minister for Works and Railways, upon notice -
– This matter has not yet been considered by the Government.
asked the Minister representing the Minister for Markets and Migration, upon notice -
– The information is being obtained.
Message received from the House of Representatives intimating that it had agreed to the amendments made by the Senate in this bill.
Message received from the House of Representatives intimating that it had agreed to the amendment made by the Senate in this bill.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended, and bill (on motion by Senator McLachlan) read a first time.
. - I move -
That the bill be now read a second time.
The object of this bill is to approve of an agreement between the Commonwealth Government and the commissioners of the State Savings Bank of Victoria in relation to the erection and purchase of homes for returned soldiers in that State. This branch of Commonwealth activities has been go verned by the War Service Homes Act, but, so far as Victoria is concerned, the work has for some time been carried out by the State Savings Bank, the relationship existing between the War’ Service Homes Commission and the bank being that of principal and agent. The bank has accepted no responsibility for the repayment of any advances made in connexion with the erection or purchase of war services homes. That relationship is altered by the bill. The bank will continue to function as formerly; but it will accept full responsibility for the repayment of the advances made to it by the Commonwealth. The amount for which it will be responsible in respect of past advances will be fixed by the Auditor-General. In practically every other respect the provisions of the War Service Homes Act will apply. Advances will carry interest at the usual- rates. Various machinery clauses to provide for the better control of war services homes are included in the bill. The Commonwealth, by its officers, will have power to inspect a war service home at any time during the course of construction, or on completion of the work. Part I. is of a purely machinery nature. It provides that the agreement shall not come into force until it has been ratified by this Parliament and also by. the Parliament of Victoria. I understand that the Victorian Parliament has already ratified it, so that it now remains for this Parliament to do the same. Part II. relates to the adjustment of past transactions. The AuditorGeneral will finalize matters of finance as between the Commonwealth Government and the bank. Subject to certain limited appeals, the bank will accept liability for the amount shown in- the certificate of the Auditor-General. Honorable senators may be interested to know that, up to the 30th November last, the State Savings Bank of Victoria had erected 3,045 war service homes. In addition, it had purchased 204 homes, discharged mortgages in respect of 35 homes, and had enlarged one home. The number of houses now in course of construction is 163, while tenders have been called for 35 more. The total expenditure to the 30th November, 1927, was £2,412,196, of which £501,771 had been repaid. Arrears at that date amounted to £4,136 ; the total amount outstanding, including arrears of interest, was £2,331,118. Part III. governs the advances which may be made under the new arrangement. The somewhat complicated method of computing interest is dealt with by clause 17 (2). There are ample safeguards to ensure that the money advanced shall be expended in accordance with the agreement, and that the bank will repay the advances, together with interest thereon.
SenatorFoll. - In the event of a soldier not fulfilling his obligations, will the bank be given any additional powers ?
– The powers of the bank are strictly limited to those vested in the War Service Homes Commissioner under the War Service Homes Act. In addition, clause 23 of the agreement provides for the rigid observance by the bank of the provisions relating to persons to whom advances may be made. Sub-clause b provides that the bank will not, out of moneys advanced by the Commonwealth, advance to any borrower a greater sum than £800 unless authorized in writing by the commissioner. There has been an increase, as honorable senators are aware, of the amount that may be advanced, and that will be given effect from time to time.
SenatorFoll. - What power will the bank have in the case of default by a returned soldier?
– The bank will be in the same position as the War Service Homes Commission is in now.
– Will not the War Service Homes Commission retain to itself the right of ejectment in cases of default ?
– No. The State Savings Bank authorities, having accepted full liability for the whole of the amount advanced, will take the place of the War Service Homes Commission in respect of all administrative acts, subject to the provisions of that act.
– Will returned soldiers have the right of appeal to the commission ?
– Not with regard to ejectment or matters of that kind. It would not be reasonable to expect the bank to accept full responsibility for the expenditure of moneys advanced by the Commonwealth, and surrender its right to realize on its security. I direct attention to paragraphs c, d, and e of clause- 23 of the agreement, which read -
There are machinery provisions in clauses 24 and 25 to provide that where there is any conflict of interest, or where an” injustice is being done to returned soldiers by any administrative act of the bank, the Commonwealth may, by giving three months’ notice, terminate the agreement. As the agreement has worked very satisfactorily hitherto, I have no hesitation in asking honorable senators to pass the bill.
– Honorable senators are. again called upon to consider rush legislation in the closing stages of the session. It is much to be regretted that this bill was not introduced much earlier so that honorable senators could have had ample time to study its provisions and discuss it with a full knowledge of all that it contains. I gather from the statement of the Honorary Minister (Senator McLachlan) that it ratifies an agreement between the Commonwealth Government and the Savings Bank Commissioners of Victoria, whereby the Commissioners will continue the erection in that State of homes built under the War Service Homes Act. I understand, however, that the agreement will not in any way interfere with the authority of the commission in respect of homes built prior to the agreement. It also defines the position of the Savings Bank Commissioners vin relation to future building operations under the War Service Homes Act.
– And particularly -their responsibility.
– I was about to mention that phase .of the measure. Hitherto the savings bank authorities in Victoria have been in the position of agents for the War Service Homes Commission. This agreement will definitely place them in the position of a principal.
– As regards their liability.
– In future they will be responsible for the repayment of interest and principal in connexion with the erection of war service homes in that State. In other words, they will be in much the same position as the authority to be created under the Commonwealth housing scheme. The Commonwealth will advance money for the erection of war service homes in Victoria, and the commissioners will be responsible for the building of the houses and repayment of interest and
Principal; but the authority of the Warervice Homes Commission in respect of homes built prior to the agreement will remain unimpaired. I believe that a similar arrangement has been come to with two other States besides Victoria. I see no reason why the agreement should not be ratified. The Savings Bank Commissioners will accept full -liability for all moneys advanced under the provisions of the bill, and any amounts in dispute will be certified by the Auditor-General, so that the Commonwealth revenue will be amply protected. These- are the main features of the measure. I see no reason to object to its second reading.
– The bill may or may not be all right.. The agreement appears to provide for nearly everything that can be desired; but, with the Leader of the Opposition (Senator Needham) I regret that honorable senators have not had more time for its consideration. I should like to be quite sure that, if, under the agreement, the savings bank authorities of Victoria will have full responsibility for the administration of war service homes throughout Victoria’, returned soldiers who may find themselves in difficulties will receive as much consideration from the commissioners as they would get. and have received from the War Service Homes Commission. We all know that in certain cases a good deal of leniency has been extended to ex-soldiers who have been unable temporarily to discharge their obligations. It is, howover, to their credit that the defaulters have been so few in number.
– They represent scarcely 1 per cent.
– The amount outstanding is, I understand, very small. It has been necessary for the administration from time to time to show special consideration, and I should like to be sure that that practice will be continued.
– There is no provision for it in the principal act, but consideration has been shown as an act of grace.
– I believe that the knowledge that this Parliament has been in the position to intervene has, to some extent, been responsible for the consideration that has been shown in individual cases. Naturally, the War Service Homes Commissioner, knowing the wishes of this Parliament and the Government, has shown a certain amount of leniency in administration. I should like to know that the interests of ex-soldiers in this respect will be safeguarded when the jurisdiction passes into the hands of the Savings Bank Commissioners of Victoria.
– Does the bill mean that?
– That is provided for in the agreement. The only safeguard, so far as I can see, is the right of the Government to give three months’ notice to terminate the agreement if it is not working smoothly. That, I admit, is a considerable safeguard ; but I should like to see in the agreement a provision giving to ex-soldiers the right of appeal to the War Service Homes Commission in certain cases. If that had been incorporated in the agreement it would have been an additional safeguard, and I have no doubt that it would have been accepted by the bank. In all probability it would not be operative in many instances; but the fact that it was there would give ex-soldiers an additional feeling of security. We should not forget that this measure proposes to hand over to the Victorian Savings Bank Commissioners complete authority in that State for homebuilding under the War Service Homes Act, and that the Commissioners are, at the same time, administering their own home-building scheme. It might happen in the absence of the safeguarding provision I have mentioned, that, in cases where the interest of the bank clashed with the interest of returned soldiers, the interest of the bank would prevail. Honorable senators have not had time to make themselves thoroughly conversant with the provisions of either the bill itself, or the agreement. To that extent we are making a plunge in the dark. We can only hope, therefore, that the Attorney-General, who has drawn up the agreement, has included in it the necessary clauses to safeguard the interests of returned soldiers.
.- I should like to have some explanation from the Minister (Senator Mclachlan), with regard to the inspection by officers of the War Service Homes Commission of homes in course of erection. I understand that, under the bill, the State Savings Bank Commissioners of Victoria . will be responsible for the drawing of all plans, and also for the inspection of houses during construction, but that the War Service Homes Commission will, at all reasonable times, have access to any buildings that may be erected under this agreement. Apparently in certain cases there will be two sets of inspectors. Whose word is to be final in a matter of construction if the representative of the War Service Homes Department does not agree with the representative of the State Savings Bank of Victoria?
Senator McLACHLAN (South Australia - Honorary Minister [3.31]. - It is true that the administration of this function of government in Victoria will rest with the State Savings Bank, which since July, 1922, has been carrying out the work in a slightly different way and under slightly different conditions. In Tasmania, South Australia and Western Australia the work is, as stated, being undertaken by State instrumentalities on behalf of the War Service Homes Department. I direct the attention of Senator Duncan to paragraph (c) of clause 24 of the agreement, which provides that - the bank will not require a borrower to comply with conditions of repayment which are less favourable to the borrower than theconditions of repayment of advances contained in the act and regulations.
That clause does not go to the extent which the honorable senator wishes; but it is as far as we can possibly expect an authority to go which makes itself liable for the repayment of the money, irrespective of whether the purchaser does or does not repay it. The safeguarding provision is that if any dispute arises, which is not anticipated for a moment, the Commonwealth has the right to terminate the agreement. In regard to the point raised by Senator Foll I may say that it will be only in cases of disputes that the services of an inspector, architect, or officer of the commission will be required. Should a dispute arise the representative of the commission will exercise his influence between the purchaser and the bank. If the bank’s representative should prove recalcitrant, which is not likely, action will have to be taken to see that the contractual obligations between the bank and the Government are observed.
Question resolved in the affirmative.
Bill read a second time.
Clauses 3 and 2 agreed to.
Clause 3 (Approval of agreement).
– Will the Honorary Minister (Senator McLachlan) state what the responsibility of the State Savings Bank of Victoria will be in regard to the liabilities already contracted by the War Service Homes Commission in Victoria?
Senator McLACHLAN (South Australia - Honorary Minister [3.35]. - The point raised by Senator Herbert Hays is covered by part II. of the agreement, which may be summarized in this way: The balance now in the hands of the State Savings Bank of Victoria, and which it has to pay over to the War Service Homes Commission when received, isto be ascertained on the certificate of the Auditor-General. This will be capitalized and charged against the bank, which is responsible for its repayment, just as it is responsible for. the repayment of moneys advanced for the purchase and construction of homes. In short, it is to be brought into the same account as the money to be advanced in the future.
– Who is responsible for the outstanding liabilities ?
– The bank accepts the responsibility.
.- I do not profess to understand the agreement; but I should like to be certain whether the War Service Homes Commission will lose entire control of the work to be undertaken in Victoria when this agreement has been ratified. The Agricultural Bank in Tasmania at present acts for the War Service Homes Commission in that State, but the commission still retains complete control and is capable of hearing appeals in the event of a dispute. I am unable to ascertain whether that right is preserved under this agreement or whether the whole work is to be handed over to the State Bank of Victoria. If that is so it seems that the Commonwealth Government is finding the money, and is giving power to the bank, which does not accept any responsibility. As mentioned by Senator Dun can the commission seems to be losing entire control, and the occupants of War Service Homes will have no right of appeal.
.- The Agricultural Bank in Tasmania is acting as the agent for the War Service Homes Commission in that State in the same way as the State Savings Bank of Victoria has been functioning -in Victoria, but without financial responsibility. Under this agreement the responsibility for the repayment of the money the Commonwealth is to advance, and for that capitalized, will rest with the State Savings Bank of Victoria which it will have to repay at the end of twenty years whether it receives it or not.
– What will be the position of a purchaser who has a grievance ?
– The WaiService Homes Act does not give home purchasers the right of appeal; but the administration provides certain facilities. This practice will continue, because the bank will not enter into this obligation with the intention of quarrelling with home purchasers. Its desire will be to satisfy the purchasers as has been the desire of the commission in the past. If a purchaser has any complaint to make he will approach the department which will make representations to the bank. Although we are altering the form of control the work will still be carried out by the bank, whose responsiblity is governed by the terms of the agreement.
– To whom can home purchasers appeal?
– No provision is made for appeals. If a home purchaser says that in his opinion the savings bank is acting improperly, the War Service Homes Commission will communicate with the bank. Disputes are generally in connexion with construction, and these are specially provided for. If any other dispute arose the commissioner would ascertain if the agreement had been departed from; but that is not likely as the savings bank has already been functioning in this connexion in a satisfactory manner.
– But the commissioner extends leniency outside the agreement.
– Yes. The arrears to the bank, as I have said, amount to only £4,136, and this will still come in. The fact that there are arrears, however, shows that an iron hand has not been exercised.
– That is what wa wish to be continued.
Clause agreed to.
Clauses 4 to 7 agreed to.
– The first paragraph of the agreement reads -
Memorandum of agreement made this seventh day of April one thousand nine hundred and twenty seven, between the Commonwealth of Australia and the commissioners of the State Savings Bank of Victoria.
Honorable members will notice that although eight months have elapsed since the agreement was signed by the contracting parties we are being asked only now to ratify it - shortly before the present sitting of the Parliament terminates. I should like to know why there has been such delay in bringing the bill forward.
– The agreement was executed in April last, but as honorable senators will remember there was subsequently a general election in Victoria which prevented the Victorian Parliament from at once ratifying the agreement. In these circumstances it was not deemed desirable . to introduce the measure into this Parliament until the agreement had been passed by the State legislature.
– When did the State Parliament ratify the agreement?
– Only last week, I understand.
– Have the savings bank commissioners been operating undei? this agreement since it was signed?
– No, they have been operating under the old agreement, which contained an elastic provision permitting that to be done.
– There is no need to validate what has been done?
– No. This agreement does not come into force until the State and Commonwealth Parliaments have approved of it.
Schedule agreed to.
Title agreed to.
Bill reported without amendment ; report adopted.
Bill read a third time.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended and bill (on motion by Senator McLachlan) read a first time.
– I move -
That the bill be now read a second time.
The object of the measure is merely to approve an agreement that has been entered into between the Commonwealth Government and Amalgamated Wireless Australasia Limited. Its importance lies in the fact that it brings up to date and into line many issues that to some extent were open between the two parties to the agreement. I may say in passing that that importance cannot be measured by the length of either the bill or the agreement, because wireless is destined to play a very big part in our future, isolated as we are in the Southern Pacific. . Civilization owes much to a number of individuals. It owes a debt to the master mind which invented the telegraph, and to the men of all races who have assisted to extend its usefulness. It owes a debt also to the great discoverer of wireless and to those who to-day are developing it in conformity with the needs of the people. By its use we are brought closer to the centres of civilization. It has also been the means of saving lives at sea, and it is likely to prove helpful in the defence of this country as the years go by. I do not think we need concern ourselves with its early history in Australia. It is within the knowledge of honorable senators that in 1922 an agreement was entered into between the Commonwealth Government and Amalgamated Wireless Australasia Limited under which the Government acquired 500,001 shares in a company which had a capital of £1,000,000. That agreement was objected to in certain quarters, but it received the approval of the Parliament of Australia, and, subject to a modification that was inserted in 1924, has been operating ever since. The value of the patent rights, which are one of the assets of Amalgamated Wireless Australasia Limited, has been assessed at various amounts in the balance-sheets of the company. If those patents are valid - and I venture the opinion that these large overseas corporations would not have contributed one farthing of the tribute levied by the holders of similar rights in other countries unless they were assured of their validity - their value is not a matter for computation, but is limited only by the amount which they can earn for the concern which possesses them. The man in the street, viewing the position generally, and having regard to the fact that the Commonwealth Government holds more than one-half of the total number of shares, is probably anxious to see a reduction effected in the tribute that is levied from the users of wireless sets. It is certain that those .who trade in those instruments have evinced a keen anxiety to be relieved from the tribute they are called upon to meet. A great deal of publicity has been given to the matter. Honorable senators will remember that, at the instigation of a number of the parties concerned, a royal commission was appointed a few months ago to investigate generally the position with regard to wireless in Australia. That commission examined a number of witnesses, and heard a tremendous volume of evidence, after which it arrived at certain conclusions.
– None of which has been accepted.
– The Leader of the Opposition will find that, with certain modifications, the first set of recommendations has been accepted, and that it is now proposed ‘under this measure to give effect to them. The* position was investigated from various other angles, but we need not concern ourselves with those for the moment, because they are still engaging the attention of the Government. Amalgamated Wireless Australasia Limited were charging 12s. 6d. in respect of valve’ sets and 5s. on every licence issued to a listener-in. The commission regarded those, charges as excessive, and recommended that they be reduced. It was not prepared to either discuss or consider the validity of thipatents that are held by the company, but that question has received the consideration of the neighbouring dominion of New Zealand, where the patens rights have been challenged. It-would ill become Australia, which has its own patent laws, and is bound by an international convention on patent rights, to either question or take any action with respect to those rights, especially in regard to a company in which the Government is vitally interested. It is to be presumed that until these patents have been challenged in a court of law and their invalidity has been established, they are valid. A challenge was issued to the Government of New Zealand, which has thrown the mantle of its protection round the listeners-in, and practically agreed to adopt the role of defendant in the event of their being attacked by Amalgamated Wireless Australasia Limited. Adopting the recommendation of the commission, the Commonwealth Government has said to Amalgamated Wireless - “ This confusion and these quarrellings must cease, in the interests of not only wireless itself, but also the general community. It is time that the trouble was settled, so that you may proceed with your business.” Therefore, negotiations took place between representatives of the Government and the directors of the company. Before proceeding further, I shall say a word or two regarding the findings of the commission which, according to the Leader of the Opposition, have not been given effect to. The commission has indicated that, as a last resort, the Government might have to take over Amalgamated Wireless Australasia Limited, and work it in conjunction with the post office.
– That should have been the first resort.
– The commission indicates very strongly that it would not be in the interests of the nation, civilization, or wireless itself to have control by the Post Office. It advises the Government to act in the way I have indicated only as a last resort. The honorable senator will find in the commission’s report the following paragraphs: -
In view of the fact that litigation had commenced between Amalgamated Wireless Australasia Limited and certain of the parties which were represented before the commission, it was precluded from taking evidence on any of the matters involved in the litigation. These matters, however, did not seem to have any material bearing on our investigation.
The commission realized at an early stage in its inquiries that radio as a means of communication was in process of rapid development, and that great care must be taken not to hamper this development or to create powerful vested interests.
Another suggestion was direct control of broadcasting stations by the Government.
In our opinion, such a system is inadvisable, iia experience already shows that when Governments are placed in charge of the means of disseminating news, they are apt to use such means for the purposes of political propaganda.
Moreover, such a “system would deprive the public of the benefit of the incentive which the present regulations give to the broadcasting stations to maintain an effective and satisfactory service.
Further, whatever wisdom may be displayed in the selection of Government officials for such a purpose, it is difficult to maintain that high ‘standard of business acumen which is essential to securing the best results.
Those paragraphs do not give a very strong lead to the Government to nationalize wireless or broadcasting.
– I did not expect it.
– I do not know the politics of the members of the royal commission, but their report in that regard seems to me to breathe a lot of common sense. They indicate the lines on which the Government should proceed, and after commenting on the royalty charge in connexion with the use of valves, and the amount received in respect of each licence, they make the following calculation : -
The representative of the Victorian radio interests estimated that 50,000 was a fair estimate of the number of sets that would be sold in the Commonwealth in one year, and on the average these sets would contain four valve socket holders. The commission is of opinion that 50,000 is an excessive estimate, and prefers to assume a sale of 25,000. On this basis the company would have been entitled to royalties to the amount of £62, 500 on receiving sets per annum.
Assuming that the company’s patents are right, the royalties of them alone would amount to a great deal more than it will receive under the agreement which this bill asks Parliament to ratify. There were one or two matters between Amalgamated Wireless Australasia Limited and the Government which needed cleaning up. For instance, there was the dispute as to whether or not terminal charges should be paid by the company. That matter has been cleared up by this agreement. There was also the question of the validity of the company’s patents. As I have already pointed out, it was not for the Commonwealth Government to challenge the validity of the patents claimed to be held by its partner in the control of wireless, but the matter had to be safeguarded in some way, and it is safeguarded in paragraph 11 of the agreement. Under that provision the company, after entering into certain other obligations, has undertaken to bring to a successful issue in a court of final resort the test cases which are now proceeding with regard to the validity of its patents. Certain cases are now being decided in Australian courts of law. If Amalgamated Wireless Australasia Limited is entitled to receive 3s. per annum out of each licence-fee - formerly it received 5s. per annum - the revenue it will receive from this source will amount to £37,500 a year ; and it is only natural that we should wish to know that they are not getting this money for nothing. Accordingly, the Commonwealth Government has told the company to have its patent rights tested in a court of law, and if, on reaching the final court of appeal, it succeeds in establishing the validity of its patents, Part II. of this agreement, relating to broadcasting and the use of its patents, will continue; but if it fails to do so, this part of the agreement will be terminated. But as this would be a direct inducement to the people of Australia not to go on with their challenges of the validity of the company’s statements, inasmuch as for the future they would be relieved of the payment of all charges for the use of the company’s patents, the Government had to look for some other means to secure itself. The course it has taken has been to ask Amalgamated Wireless Australasia Limited to test the validity of its own patents and have the matter brought to a final issue in Australia within twelve months of the coming into force of this agreement. A case is now pending in which the company is pressing its claim for an infringement of its patents, and the Government has asked it to proceed with the case until final judgment is obtained or to proceed in New Zealand. If it fails to do so, Part II. of the agreement will be terminated. The important part of the bill is the agreement which Parliament is now asked to ratify. It is, of course, to run alongside the two other agreements with Amalgamated Wireless Australasia Limited already ratified by this Parliament. The real essence of the present agreement is to be found in paragraph 6. Under that provision the company will make its Australian patent rights available free of charge during the currency of Part II. of the agreement. These patents are defined in paragraph 7 in the widest possible language. They cover not only those which are owned by Amalgamated Wireless Australasia Limited, but also, with small exceptions, those which the company is entitled to use. Paragraph 8 provides for the payment by the Commonwealth to the company of 3d. per month for .every listener’s licence. Para.raph 9 makes the Australian patent rights available free of charge to the Commonwealth in connexion with the manufacture or use of any plant or apparatus provided that such plant or apparatus is manufactured and used exclusively by the Commonwealth or if it is manufactured by or purchased from the British Government and used exclusively by the Commonwealth, or if it is purchased by the Commonwealth from the company and used) exclusively by the Commonwealth. If these three conditions are observed the Commonwealth Government has the free, exclusive use of Amalgamated Wireless Australasia Limited patents, not only those in the name of Amalgamated Wireless Australasia Limited, but also those under the control of the company. Under paragraph 10 the company agrees during the currency of Part II. of the agreement to grant a licence free of royalty to each newspaper published in the Commonwealth, and each wireless telephone broadcasting station in the Commonwealth which makes application therefor, to use any or all of the patents referred to in the agreement. This will enable the country press to obtain the Rugby news service without any levy being imposed on them. Paragraphs 11 and 12 of the agreement are very important. I have already referred to paragraph 11. It provides for the establishment by the company of its right to its patents in the courts of Australia or New Zealand, and that the New Zealand action has to be commenced within twelve months. There were various other outstanding matters between the Amalgamated Wireless Australasia Limited and the Government. One was that the price of the coastal stations, which had been fixed by arbitration at £56,500, was not to be paid to the Commonwealth Government until the last call had been made on the shares which the Commonwealth Government had taken up in the company. It might not be a very important- matter, but it seems to have been a very unbusinesslike arrangement, because, if the coastal stations had earned a profit instead of incurring a loss, as they did, the Commonwealth would have been getting no return on its money. We have managed to arrange it so that any moneys due to Amalgamated Wireless Australasia Limited shall be deducted from any moneys owing by the company to the Government. There will be a debit and credit account, and this amount of £56,500 will stand to the credit of the Commonwealth in any financial transactions between it and the company. The company will retain the coastal stations and discharge all our international obligations in regard to them. The annual cost of those stations before they were handed over to Amalgamated Wireless Australasia Limited was between £34,000 and £35,000. The Government has agreed to subsidize the company for the management of these stations to the extent of £45,000 a year, but it is to get back 30 per cent, of the revenue earned by them. That may appear to honorable senators to be a curious way of doing things, but the reason for it is clear enough. It is anticipated by the advisors of the Commonwealth Government that there may be an increased revenue at one station due to negotiations now proceeding. If we receive that 30 per cent, our outlay will be reduced. The principle underlying the agreement is that wireless communications outside Australia shall be in the hands of the Amalgamated Wireless Australasia Limited, subject to certain control by the Government, while wireless communications within Australia shall be under the control of the Postmaster-General’s Department. I desire to draw particular attention to sub-clause 5 of clause 14 of the agreement, which reads -
Notwithstanding anything in clause 11 of the principal agreement, the fixation of all rates for traffic to be charged by the company shall be subject to the approval of the Commonwealth.
Other clauses deal with a variety of technical terms, which are- considered necessary by the experts, but with which most honorable senators are probably unacquainted.
– What is a terminal charge ?
– Although no service may be rendered by the PostmasterGeneral’s Department, a charge is made in respect of certain messages received in this country by every cable or wireless company. Honorable senators will agree that it is only fair that on the expiry of the period of five years referred to in part 2 of the agreement, Amalgamated Wireless Australasia Limited, having reliquished its rights over that period, and the Government not being prepared to carry on, should’ as far as possible be reinstated in its old position. Clause 21 deals with that matter. Whether part 2 expires by effluxion of time, or owing to the inability of Amalgamated Wireless Australasia Limited to meet its obligations - a most unlikely happening - we cannot expect that the company will do other than take action to protect its rights. Clause 21 contains the following proviso -
Provided that no demand shall be made or proceedings instituted in respect of any use of the patents which occurs during the currency of part 2 of this agreement, and is in accordance with that part.
The science of wireless, which affects our lives in so many ways, will be helped by this measure. It will bring the Government and Amalgamated Wireless Australasia Limited into a closer relationship and allow the company to continue the far-sighted policy upon which it has embarked. The thanks of the community are due to those connected with the company who have assisted to bring Australia to the forefront in wireless matters. We are indebted to the men of vision who have been in control of the company, and to the many capable young Australians associated with it. Of the 800 employees of the company who have been sent abroad from time to time to study wireless science only two - and one of those, the general manager, who came to Australia from the Old Country and has been here for sixteen years - have been other than Australians. Australia should be proud of that record. The company has been faced with serious difficulties, but it has triumphed over them. We should be proud of its accomplishments and do all that we can to encourage it. I commend the bill to the Senate believing that it will assist the science of wireless, so that before long not merely will the prophecy that the earth shall be girdled in 40 minutes be fulfilled, but that feat will be accomplished in less than 40 seconds.
.- Every honorable senator will agree that it is time a bill to deal with wireless broadcasting came before us, especially in view of the importance of wireless to the isolated sections of the community. I do not profess to know a great deal about wireless myself, but I have had many conversations with men who have studied the science, and realize the still greater benefits which it will in future confer” upon the community. Within the last few days I have read in the Radio Journal, published in Sydney on the 23rd November last, a number of interesting articles. In one of them the writer referred to what he considered were weaknesses in this bill. He said -
The weak parts appear to be that in consideration of the company waiving claims covering £125,500, it will receive a 3s. payment on listeners’ licences, a total of £37,500 per annum, or £88,000 less than originally demanded, although the making of such demand was adversely reported on by the royal commission. Furthermore, the Commonwealth Government, by granting £37,500 per annum to Amalgamated Wireless for alleged patent rights, have virtually estimated such patent rights at a capital value of £375,000, although they have not yet been validated.
– There is no need to validate what is granted; in that case validity is assumed.
– That may be so; but, evidently, the royal commission reported adversely .on the claim referred to. I have been asked to draw attention to what is regarded as a serious omission from the bill. Clause 6 a of the agreement reads -
The company shall make its Australian patent rights available’ free of charge during the currency of this part to - (a), ouch wireless telephone broadcasting station in the Commonwealth and its territories, for the purpose of the establishment and carrying on of wireless telephone broadcasting services.
My informant has pointed out that by including the word “ telephone “ the clause will restrict the benefits which wireless will confer on the community. He has suggested that in the interests of the community the word “ telephone “ should ‘ be omitted. Clause 6 a would then read -
Each wireless broadcasting station in the Commonwealth and its territories, for the purpose of the establishment and carrying on of wireless broadcasting services, and
I understand that wireless experimenters are of the opinion that further wonderful developments in wireless may be expected at almost any time. They point out that in that event the whole community would be penalized, because with clause 6 unaltered, Amalgamated Wireless Australasia Limited would be able to demand almost any sum before allowing messages to be transmitted by any new system.
– The honorable senator appears to visualize another Marconi.
– The people to whom I have been referring are certainly enthusiasts; but in the light of developments that have taken place during recent years, we should be prepared for still further marvels. Every week opens up new avenues, so that it is impossible to predict the discoveries which may take place within the next few years. My informant is very anxious that nothing that we may do will in any way prevent the fullest use being made of further developments in wireless.
– This bill does not create a monopoly.
– Nevertheless only one form of broadcasting will come within its provisions. I have stated my case as clearly as v possible in the light of the information at my disposal. I propose to deal further with the bill when it is in committee, and I hope that honorable senators will then consider the advisability of amending the schedule along the lines which I have indicated.
Debate (on motion by Senator Needham) adjourned.
Bill received from House of Representatives.
Standing and Sessional Orders suspended, and bill (on motion by Senator Sir George Pearce) read a first time.
Senator Sir GEORGE PEARCE (Western Australia - Vice-President of the Executive Council [4.33]. - I move -
That the bill be now read a second time.
The object of the measure is to remove an anomaly which has occurred as the result of the amending Maternity Allowance Act of 1926. The original act, passed in 1912, provided that women who were Asiatics could not receive maternity allowances. British nationality, whether inherent as natural-born or acquired by naturalization, or by marriage to a British subject,’ did not overcome this disqualification. As a result, it was necessary to reject claims for maternity allowances by Asiatic mothers, such as Syrians, even though they might have been born in Australia or had been resident in the Commonwealth for many years. In order to remove this disqualification, the act was amended last year by deleting the provision relating to Asiatics, and providing, in its stead; that women who were aliens should not be eligible to receive an allowance. When this amendment came into operation, it was found . that, whilst the desired effect of admitting certain classes of claimants had been achieved, other persons who had previously received maternity allowances had become ineligible. Thus women who were natural-born or naturalized British subjects, but who had lost their British nationality through marriage to aliens, were rendered ineligible. Cases arose in which it was found necessary to reject claims from women who were born in Australia and whose parents were British subjects, but who had lost their nationality through marriage to aliens. Some of these women had already received maternity allowances in respect of the births of previous children. In order to prevent an injustice the Government decided, pending the passing of amending legislation, to authorize payment from a special vote of an amount equal to the maternity allowance to women who were natural-born British subjects and who had lost their British nationality merely as a result of their marriage to aliens. This benefit was, however, confined to natural-born British subjects and did not extend to women who had obtained British nationality as the result of their’ parents’ naturalization. The payment was also conditional on the husbands of the claimants undertaking to apply at once tor naturalization. The amount paid from the special fund during the financial years 1926-27 in respect of these cases was approximately £1,200. The bill which is now being submitted is designed r,o remove the existing anomaly by enabling maternity allowances to be paid to women who were formerly British subjects and who have lost their British nationality merely as a result of marriage to aliens. The provision is very similar co one contained in the Invalid and Oldage Pensions Act - sections 16 (2) and 21 (2) - whereby the benefits of that act are preserved to women who have married aliens, Asiatics, or other persons who are disqualified from receiving a pension on account of their nationality. The proposed amendment goes somewhat further than the existing practice of making payments from the special fund, because at present these payments are confined to women who were natural-born British subjects, whereas under the amendment any woman who was a British subject, whether natural-born or naturalized, will be eligible to receive a maternity allowance, provided, of course, that she possesses the other qualifications required by the law. The cost of the proposed amendment is estimated at £2,000, but as a set-off against this there will bc a saving of £1,800 in respect of payments from the special vote, which will no longer be necessary. Honorable senators will see that the bill does nothing more than to remove the anomalies to which I have referred. T feel sure, therefore, that it will commend itself to the Senate.
Senator NEEDHAM (Western Australia [4.38]. - This amending bill appears to be very much on the lines of a similar amendment to the Invalid and Old-age Pensions Act. Its object is to permit of the payment of maternity allowances to Australian-born women who, through marriage to aliens, have lost their nationality. Although, considered from a local stand-point, such women have lost their nationality, it is a pity that they should be deprived of the benefits of the act. They should not be penalized in this way. In the circumstances I see no reason why the bill should not be agreed to.
Question resolved in the affirmative.
Bill read a second time and passed through its remaining stages without amendment or debate.
Bill received from the House of Representatives.
Standing and sessional orders suspended, and bill (on motion by Senator McLachlan) read first time.
– I move -
That the hill be now read a second time.
Though the measure is somewhat lengthy, its subject-matter does not call for a great deal of discussion, except in respect of one or two points. Its object is to clarify a number of provisions in the present law that have been the subject of contention between the department and taxpayers. It abolishes the objectionable retrospective assessments, and will give stability to assessments by establishing a valuation board and providing machinery for strengthening departmental administration. It also deals with certain other matters to which I shall refer in detail when the bill is in committee. I feel sure that the measure will commend itself to honorable senators. Possibly one of the greatest causes of irritation in the past has been the power under the principal act to make retrospective assessments. This it is proposed to abolish under this measure. Assessments are now to be made in respect of triennial periods, which is a provision that will commend itself to land-owners. Certain powers are also given to tile board to grant relief to persons deriving ‘ income from land used for primary production whose returns are restricted owing to drought or other adverse conditions. This has been sought for a considerable time, and will be much appreciated. Consideration has been given to the position of sporting clubs and bodies of persons whose lairds, when used primarily and principally for athletic sports or exercises other than horseracing, are now to be exempt. A subject in which some honorable senators may be interested is the elimination of a shareholder’s interest in the unimproved value of land held by a limited company where it does not exceed £500. The departmental practice up to the present has been- to disregard the taxpayer’s interest in such circumstances where it does not amount to more than £100. This amount is now to be increased to £500, as it has been found that the revenue received from this source does not justify the work involved in arriving at a taxpayer’s actual interest. The shareholders in limited companies will be relieved to this extent, and the department will be saved a good deal of unprofitable work. The establishment of a valuation board to review and finally determine land values as between taxpayer and the department has been sought in many parts of Australia. It has been found that the Supreme Courts of the States and the High Court of Australia are not sufficiently familiar with the varying conditions which obtain all over Australia to enable them to deal with such a complex problem as the valution of land in a manner which is quite satisfactory, not from a legal, but from a practical viewpoint. The valuation board or boards will deal with land values iti different States and localities. When we remember that there are pastoral and farming lands, lands suitable for intense culture, as well as land suitable for vegetable and fruit-growing, it will readily be realized that one authority cannot have an intimate knowledge of all classes. The amendment proposed will, I am sure, meet with the approval of taxpayers, and assist in speeding up the work, of the courts. I do not wish honorable senators to infer that the tribunals to be established will take the place of the courts altogether, because questions of law will still be settled by a judge of a State court or of the High Court of Australia. The board will function only in ascertaining the value of land. There is also another matter which has given the Commissioner of Taxation some trouble and a good deal of anxiety and inconvenience in administering the department. At present the Commissioner of Taxation is constantly compelled to delegate certain powers to the Assistant Commssioner of Land Tax. This officer is now to be known as the Second Commissioner, and will be vested with the power of the Commissioner. This, the Commissioner hopes, will avoid many delays that now occur, and will enable him to function to the full. The Commissioner will not be tied to his office as at present, and will be able, therefore, to pay more frequent visits to the several States. The taxation machinery which in the past has been controlled by one person will now be driven by an additional hand, and the smoother working of the department will be facilitated. This will be very helpful to the taxpayers. The departmental definition of “ parcels of land “ has been in operation for seventeen years ; but it has now been found necessary to embody it in the act. This is being done under clause 7. There are various other more or less unimportant provisions, such, for instance, as fixing the hour in which a change of ownership shall be deemed to have taken place. This is provided for in clause 8. There are also amendments to improve the method of collecting taxes in connexion with which the legal provisions of the act have been clarified. The balance of the measure consists more or less of machinery clauses, of such a nature as to grant a measure of relief to the community. I commend the bill to the favorable consideration of the Senate.
– A few days ago I spoke at some length on the general question of land taxation I then referred to the measure now before the Senate. I pointed out that there was a danger of encouraging the establishment of large estates; which I said were inimical to the well-being of Australia, as they were largely responsible for the unemployment prevalent in every State of the Commonwealth. 1 also instanced the small proportion of money which the land-owners of Australia contribute in the way of taxation to the Commonwealth revenue. I mentioned that idle lands meant idle hands, which are a menace to any community, and referred in detail to the economic situation. The reduction of 10 per cent, is not justified, as it will benefit only the rich land-owners of Australia.
– This measure does not provide for the reduction of 10 per cent.
– I am aware of that. The bill providing for that reduction was passed last week; but I am condemning that reduction . seeing that the financial position is acute, that we are faced with a heavy adverse trade balance, and with a serious unemployment problem. The principal provisions of this bill relate to the appointment of an appeal board, triennial valuations, and the abolition of retrospective assessments. I understand that the valuation board will deal only with matters relating to land values, and that assessments will still be made in the ordinary way. I agree that it is necessary to appoint a board of experts to value land in the various States for the purpose of taxation. I cannot agree entirely with the proviso which will make it possible for other matters to be referred to the court.
– It cannot be helped.
– It could be avoided in many cases. Land owners are to be given the option of appealing to either the Valuation Board or the. court. “We have had experience of one decision of the court. I refer to that which was given in the Jowett, case. I venture to affirm that it puzzled even the Commissioner himself. “With all due respect to the court, it Avas an absurd decision, which should make us chary of allowing the court to be moved too frequently. A board of experts could determine many cases. Land owners should not be given the right to choose whether they will go before the Valuation Board or the court; it should be specifically provided that there shall be only one court of appeal. Another provision to which I wish to direct attention is that which relates to triennial valuations. It is a very important departure from the existing procedure, under which valuations are made yearly. It will not be possible to apply to the three preceding years any higher valuation that may be determined. It is feasible to expect land in certain localities to increase considerably in value during a period of three years. If that value cannot be appraised during that period a considerable loss of revenue will be occasioned. I understand that the Treasurer (Dr. Earle Page) estimates that the loss will be approximately £80,000 per annum. That is a conservative estimate, and it is likely to be greatly exceeded. One can visualize many blocks of land in different parts of Australia which will increase in -value by leaps and bounds. If they were valued yearly there would be a big addition to our revenue from that source. I object also to the clause which deals with retrospective assessments. At the present time assessments can be made retrospective for a period of two years. If that practice ceases to operate there will be a further big loss of revenue. The Treasurer did not say so when he had charge of the measure in another place, nor has the Honorary Minister expressed such an opinion in this Senate. It is a wrong departure, and vicious in principle.
– Are not retrospective assessments also vicious?
– I do not think it is fair to abolish retrospective assessments, because the drain on the Treasury will be too severe. Let us assume that a piece of land was valued at a certain figure either last year or the year before, and subsequently the department learned that a section had been under valued, or that the valuers had left one section out of their calculations.
– That contingency is provided for.
– Under the existing system the department could reassess such land; hut under this proposal that will not be possible. The income tax law confers upon the department the power to make a reassessment in the event of a mistake being made by one of its officers. It has no hesitation in issuing an amended assessment in those circumstances, and the taxpayer is compelled to pay the additional amount. If it is considered right to apply that principle to income taxation it should be right to apply it also to land taxation. It is estimated that the 10 per cent, reduction will mean a loss to the revenue of £445,000. That is too big a concession to make to a few taxpayers, considering the financial position of Australia. If we add the loss which will be caused by the institution of triennial valuations and the abolition of retrospective assessments, that amount is almost doubled. So as to give honorable senators an opportunity to assess the real value of the bill before they vote cither for or against it, I move as an amendment -
That all the words after the word “ That “ be left out with a view to insert in lieu thereof the words “ in view of the grave expanding obligations of the Commonwealth, manifested by adverse trade balances, increasing loan expenditure, of the urgent need for the sub-division of large estates, to increase production and to meet the keen demand for land, a reduction of the land tax is not justifiable.”
– I rise to order. The bill fixing the rate of tax has already been passed by the Senate. This is a bill to amend the Land Tax Assessment Act. It merely provides for certain administrative changes, and by no stretch of imagination can be described as a rates bill.
– On . the point of order raised by the Honorary Minister I submit that when this bill becomes an act, the assessments that are issued under it will be calculated at the reduced rate. Such being the case, its application to the reduction is equal to that of the Land Tax Bill. I contend, therefore, that my amendment is in order.
The PRESIDENT (Senator the Hon. Sir John Newlands). - I have just returned to the chamber, after having been relieved by the Deputy-President; consequently my examination of the mea sure has been ofonly a cursory nature. So far I have been unable to assure myself that it specifically provides for a reduction of land taxation; but the effect the bill may have on the amount of revenue that may be collected under the land tax must be taken into account. Although this bill does not deal directly with the rate of land tax to be imposed, having inview the possibility of its effecting a reduction in revenue, I must rule that the amendment is in order.
– No question should engage the serious and earnest attention of the Senate more than the land tax. ‘ The taxation of land is paramount. Land is essential to every human being. Everything we consume or wear comes from the land, and, according to the use that is made of the land, the better off or poorer is the country and every man, woman, and child in it. No tax is more just or more scientific than a land tax. There is no analogy between it and any other form of taxation. A tax on income is a tax on effort and enterprise. On the other hand, land is not the creation of any individual. It is, as I have already said in the Senate, the creation of the Creator; but it is the people who give added value to it. A typical case was published in Melbourne a few days ago. In 1837, exactly 90 years ago, the site of an historic building, Cole’s Book Arcade, was purchased for £20.When submitted to public auction the other day it realized £200,000. By what means was that increased value given to the site? It was given by the community. It was a communitycreated value. If the population of Melbourne had remained stationary the value of that land would be little more than it was 90 years ago. Ever since it has come into existence the Labour party has known of the evils of land monopoly. It has been truly said that those who monopolize the land hold in the hollow of their hands the lives of those human beings who are on the land. When the Labour party came into office in the Commonwealth, in 1910, it realized that unless estates, many of which had for a long period of years been kept in a virgin state, were subdivided, or unless the owners were forced to put them to their fullest and best use, there would be little or no substantial progress in Australia. Consequently it introduced a bill to impose a land tax. The measure met with the strongest opposition from those who were in the possession of large areas of land. The section of the community that always supports that party opposed to Labour - and which can only be called the anti-progress party of Australia - did all in its power to prevent that measure from being placed on the statute-book. We all know that the possibilities of Australia’ are boundless. Its resources are unlimited, and it has roomfor many millions of people, provided that opportunities to go on the land are made available for those already here, and those who are disposed to come here. That was the main objective of the Labour party in 1910 when it passed the Land Tax Bill. I have in my hand a copy of a magazine published by me in 1912. It contained a splendid article by the then Attorney-General Mr. W. M. Hughes, setting forth the attitude of the Labour party towards immigration and land taxation. Mr. Hughes proved that during the two years of Labour administration the net gain to the population of Australia wa3 110,565, nearly double the increase during the preceding years since the establishment of federation.
– And there was no Development and Migration Commission in those days.
– No. With little or no publicity we got that increased population, because Australia in a measure advertised itself by the placement by the Labour administration of legislation on the statute book that made for substantial progress, and provided employment for thousands who were previously only partly employed, or were not employed at all. We made available for settlement millions of acres.
– Where ?
Senator FINDLEY. In all parts of Australia. Evidently the honorable senator does not read the documents furnished by responsible officers in the different departments. The tenth report of the Commissioner for Taxation for the years 1923-24, 1924-25 and 1925-26 indicates that up to the completion of the assessment of land held as at 30th June 1923, land of an aggregate unimproved value of £110,203,260 had passed out of the taxable field owing to the subdivision of estates. Is that not proof enough for the honorable senator? What caused those estates to be subdivided? Everyone knows that that subdivision was brought about by the imposition of the Federal land tax. Those on whom the tax was imposed said that it would force them to subdivide their estates..
– Some of them have subdivided their estates in Collins Street, Melbourne.
– In imposing the land tax the Labour Party had a twofold object in view : It aimed at the subdivision of big estates, and the collection of more revenue for the Commonwealth. It accomplished both these objections. It forced land into use that had previously been kept in a virgin state, and it secured a substantial revenue from city lands.
The PRE SIDENT. - The honorable senator is now discussing the Land Tax Bill.
– I should like to complete my reference by saying that from the date of the imposition of the tax, to the end of the year 1925-26, the revenue derived from the Commonwealth Land Tax was £31,901,133. I cannot pass this proposed reduction of the land tax without some comment on it. We know that the Government has decided to make a big cut in its loan works programme, a cut of £1,250,000 in income tax, and £80,000 in regard to land tax. Furthermore, in this bill it is proposed to have triennial instead of annual valuations. Quite a number of municipalities have annual valuations, because land in many cases increases rapidly in value within a year. In his ninth report the Commissioner of Taxation referring to the increase in values during recent years said -
In the city of Melbourne properties have changed hands several times during the past three years at ever increasing prices.
Taking particular sales, it may be said that the sales disclosed increases in value ranging from 30 per cent, to 300 per cent.
A somewhat similar influence appears to be at work in suburban districts, for there the increase ranged from 20 per cent, to 100 per cent.
There is no doubt about the accuracy of those statements. Within a short distance of Melbourne, one may to-day see thriving communities, with railway stations and shopping centres where a few years ago. there were open paddocks.
– The capital value of that land has improved, but not its unimproved value.
– The federal land tax is a tax on the unimproved value of land. That means that all improvements are exempted from taxation. The Commissioner’s report shows that in many country districts the value of land so increased that land holders who a few years ago were exempt from payment of land tax are now required to pay it.
– That is because the assessments were increased.
– It is because the land has increased in value and price.
– Has . cattle country increased in price?
– Increased population and the expenditure of public money increases the value of all lands. In the northern portions of Australia there is some splendid cattle country, but because of the absence of roads, railways or other means of communication it has a very small population, and consequently a low value. Increased population and the expenditure of public moneys in providing means of transport would increase the value of that country.
– Will the honorable senator say why the Queensland Government cannot sell its stations ?
– I ask the honorable senator not to reply to that interjection; it is distinctly disorderly.
– Without replying to the honorable senator’s disorderly interjection, I desire to say that the value of some cattle stations in Australia has fallen.
– That is because there is no sale for our beef.
– The honorable senator’s interjection opens a big field. Our export trade has declined because cattle growers are not satisfied with the prices they receive for their meat. They have, however, been assisted by the Government.
– Then why does the honorable senator say that cattle country has increased in value?
– The Commissioner’s report shows that all land has creased in value. He does not exclude cattle country, or land devoted to agriculture, horticulture, or viticulture. Nor does he exempt city and suburban land. If the value of land in Australia had not increased, Australia would indeed be in a bad way.
– The value of land in the aggregate may have increased whereas the value of cattle country has fallen. ‘
– Land is worth what it will produce. Apart from droughts, our cattle country will produce as much to-day as it produced in days gone by. The means of transport in cattle country are better than they were in past years, and that has made the land more valuable. Those engaged in cattle raising are not the only section of the community which is experiencing difficulties. Nearly all our primary producers are faced with difficulties because the world’s market is not what it was before the war. . The present financial depression in Australia and throughout the world is the outcome of the war.
– Then why blame the Government?
– I blame it for reducing taxation and not proceeding with necessary public works, thereby causing unemployment and depression.
– Where is the money to come from ?
– If there had been no reduction of income taxation, the revenue this year would be over £1,250,000 more than we shall now receive. That amount would enable the Government to proceed with necessary public worksand thereby provide more employment. I object to the proposal to reduce land taxation and also to triennal valuations. Has this change of policy been adopted because the present staff of the department is unable to make an annual valuation ? If that is the reason, it would pay the Government to increase the staff.
– Would it surprise the honorable senator to know that valuations are now made triennially?
– In view of the rapid increases in the value of land, I favour an annual valuation. If a man buys land in any of our capital cities today he is taxed on the price paid for it. But during the next three years that land may increase considerably, in value. That has happened over night. In the circumstances, it is wrong to provide for a valuation only once in every three years. If the same principle were applied to income tax, honorable senators would object. I do not doubt the Minister’s statement that triennial valuations will find favour with the taxpayers. They would not object to the total abolition of the tax, because every reduction of tax is popular with those who otherwise would have to pay. But we in the Senate should not be concerned with the popularity or otherwise of a tax; we should ask ourselves whether it is fair. The present land tax is not too high. If there is one thing more than another that will assist the development of Australia it is the imposition of a land tax sufficiently high to force some of the land now’ held in big estates either to be put to its proper use by its present owners or to be sub-divided and sold. The Development and Migration Commission has been created with a view to placing more settlers on the land. Every reduction in the land tax will increase the difficulties confronting that body. A triennial valuation of land will retard the progress of Australia. For the reasons that I have given, I shall oppose the second reading.
– There are two outstanding objections to this bill, which, in my opinion, are more than sufficient to warrant its rejection. The first is the proposal to reduce taxation by 10 per cent.
The PRESIDENT (Senator the Hon. Sir John Newlands). - Will the honorable senator show where that reduction is proposed in the bill before us?
– The principle is covered by the bill read in conjunction with another measure which we have agreed to.
– Unless the honorable gentleman can point to a provision in this bill relating to the 10 per cent, reduction, he will not be in order in referring to it.
– The provision relating to triennial valuations will mean a substantial reduction in the amount of taxation to be levied on land-owners. All who have any knowledge of land, are aware that the increase in land valu throughout the Commonwealth has been steady and progressive for a great number of years. The condition requiring revaluation once in three years .is not so objectionable as the provision in relation to Canberra leases, but it is a step in that direction. Indeed I should not have been surprised if the Government had stipulated for a revelation every twenty years. I read recently an interesting statement in connexion with the imposition of land value taxation in England more than 200 years ago. At that time the land taxwas fixed at 4s. in the pound, and the value of land in respect of which the tax was levied was fixed for all time, with the result that to-day the total amount of land value taxation received in Great Britain is only about £800,000. . I am surprised that the Government did not come down with a proposal of that kind in connexion with this bill, and it might have made it retrospective to the time mentioned by Senator Findley when the site now occupied by Cole’s Book Arcade in Melbourne was sold for £20. It is impossible in the short time at one’s disposal to deal adequately with land taxation in all its phases. If honorable senators care to study the Commonwealth Year-Boole for 1927, they will be amazed at the nominal amount raised by means of land taxation throughout the Commonwealth. The information is to be found on page 385. The figures show that the following amounts were collected by the various States in 1925-26 :-
– Order! I ask the honorable gentleman to connect his remarks with the bill now before the Senate.
– I propose to do so Mr. President. My point is that the Government by adopting the triennial valuation system is effecting a substantial reduction in the amount that should be received from the land tax. The State Governments also are dealing very tenderly with this class of taxpayers. The Commonwealth Government, however, does not hesitate to impose extremely heavy burdens on the people in the form of indirect taxation.
– This bill has nothing to do with indirect taxation. The honorable gentleman must confine his remarks to the subject matter of the bill.
– When you interrupted me, Mr. President, I was quoting the amounts of land taxation collected by the various States. If you rule that I may not quote those figures, I shall be obliged to dissent from your ruling. I strongly resent any attempt to interfere with me on this subject.
– Order! The honorable gentleman was proceeding to discuss indirect taxation when I reminded him that the bill had nothing whatever to do with the imposition of customs duties. This is a land tax assessment bill. The honorable gentleman must confine his remarks to the principle of the bill.
– Very well, Mr. President. Let me again direct the attention of honorable senators to the amount of land tax collected by the various State Governments during the year 1925-26. The figures are as under -
– That is a fairly substantial amount.
– Not when one considers the fabulous value of the land throughout the Commonwealth. I am not far wide of the mark when I say that the unimproved value of the land in New South Wales alone is in the vicinity of £500,000,000, and yet the New South Wales Government during year 1925-26 received only £2,667 from land taxation.
The total collections from this source by the Commonwealth are insignificant compared with the unimproved value of land It must be remembered also that this tax is paid not by all the land-owners of Australia, but by those only who own estates exceeding an unimproved value of £5,000.
– Why. the exemption of £5,000?
– I should like to give the history of that exemption provision, and I shall do so if the President will not rule me out of order. On page 333 of the Commonwealth Year-Book, 1926, the total of Commonwealth land tax collections since 1921 is given as follows : -
Will any one contend that,, in view of the enormous and ever-increasing value of land throughout the Commonwealth, the owners of land are bearing their fair share of taxation? I do not believe in taxing any man excessively. There should be reason in all things. I submit, however, that the communitycreated value in land should be enjoyed by the community, and that the revenue raised from it should be used for the benefit of the people. A tax upon land values is entirely different from all other forms of taxation. Actually it is not a tax at all. It is merely the act of taking for the community something which the community has created. It is all very well for some people to declare that the construction of railways and public works gives to land its increased value. Something else is required - the demand for land. If there is no demand, land has no value. Railways, bridges, and public works are authorized and constructed in places where they are required. They are necessary to meet the needs of the people. . It is the settlement of the people in different localities that gives to laud its value, because their presence creates a demand for land. In view of the facts which I have enumerated, I contend that the amount, collected by the
Commonwealth in the form of land taxation is insignificant compared with the enormous unimproved value of land. This proposal to authorize trieinnial valuations should not be countenanced. In the early history of the movement for land taxation in New South Wales there was no suggestion of an exemption of £5,000, and in none of the land laws of the States, except New South Wales, is this provision to be found. At one time, under the Holman Labour regime, the exemption in New South Wales was fixed at £20,000. In nearly all the other States statutory provision is made for a nominal exemption of £100. The Federal land tax, enacted by a Labour government, provided for an exemption of £5,000 for each estate, whether large or small.
– There is nothing in the bill dealing with the point which the honorable senator is now discussing.
– I was about to show that the Federal exemption was provided ostensibly in the interests of small land-holders, but it is operating in favour of wealthy land-owners. If an estate worth £10,000 is taxed at 6d.in the £1, the owner has either to sell it, use it, or pay the tax imposed. A practice frequently adopted is to divide an estate worth over £5,000 between the owner and his wife in order to avoid taxation. When an estate is being subdivided the auctioneer usually explains that it is valued at under £5,000, and is, therefore, not subject to Federal land tax, which results in the price immediately advancing. The tax was imposed by a Labour government for several reasons.
– The honorable senator is now proceeding to discuss something which is not covered by the bill.
– Considering the enormous commitments of the Commonwealth, in the matter of repatriation, and in other directions, the time is inopportune to reduce taxation. The Development and Migration Commission sent an expert to Mount Morgan for a few days at a cost of £1,000, and another expert to Kalgoorlie at a similar cost to ascertain what was already known.
– I ask the honorable senator to confine his remarks to the bill, otherwise I shall direct him to resume his seat.
– The measure, if passed in its present form, will in some small degree assist the work of the Development and Migration Commission. I believe that the Federal Land Tax Assessment Act has been responsible for some large country estates being subdivided, but that is hard to prove, because the aggregation and subdivision of estates is always proceeding. As only 20,000 persons are paying taxes on land, the unimproved value of which is £200,000,000 it is unreasonable to make concessions in the matter of land tax Another place which has no hesitation in increasing customs duties should be asked to increase the land tax by 25 per per cent, or 30 per cent. I regard the Government’s proposal in this instance as a retrograde step, and trust that the bill will not receive the support of the Senate.
Question - That the words proposed to be left out be left out (Senator Needham’s amendment) - put. ‘ The Senate divided.
Majority . . 13
Question so resolved in the negative. .
Original question resolved in the affirmative.
Bill read a second time.
Clauses 1 and 2 agreed to.
Clause 3 (Second Commissioner of Land Tax).
– Is the salary of the Assist-, ant Commissioner, who in future is to be known as the Second Commissioner of Land Tax, to be increased?
Clause agreed to.
Sitting suspended from 6.15 to 8 p.m.
Clauses 4 to 8 agreed to.
Section thirteen of the principal act is amended by inserting at the end thereof the following paragraph : - ” (h) all land owned by, or in trust for, any club or body of persons, and used primarily and principally for the purposes of athletic sports or exercises (other than horse racing) and not used for the pecuniary profit of the members of that club or body.”
Section proposed to be amended -
– Under this clause it is proposed to exempt from taxation all land owned by, or in trust for, any club or body of persons, and used primarily and principally for the purposes of athletic sports or exercises other than horse racing, and not used for the pecuniary profit of the members of that club or body. Has it occurred to the Minister that there may be a loss of revenue as a result of the granting of that particular exemption? I have no desire to penalize any particular sport of an athletic nature, but I have noticed that land which is held by a club or society for athletic purposes - for example, golf - is sometimes cut up and sold, and a new site is purchased out of the profits. Has it been the practice so far to tax land that is held by an athletic body?
– The intention is to exempt from taxation all land that is owned by any club or body of persons and used primarily and principally for the purposes of athletic sports or exercises, except horse racing, and not for the pecuniary profit of the members of that club or body.Football clubs, hockey clubs, golf clubs, and other bodies who own land are now compelled to pay land tax although their members do not derive any pecuniary benefit from such land. The agitation for this exemption has been proceeding for years. I was a member of a club which, in common with other similar bodies, was greatly concerned at being held liable to pay land tax. When any club or body is proved to be a trading concern, taxation will be levied. .
– Some agricultural societies rent their land to syndicates that engage in tin hare racing. That occurs particularly in districts in which gambling on the results of tin hare races is allowed. Would it not be advisable to withhold the exemption in such cases, as is done in the case of horse racing?
– The tin hare aspect of the matter has not been taken into consideration. The governing principle is that the members of a club or body must not derive a pecuniary profit from the land. If it can be shown that they do, the tax will be levied. I can hardly conceive of such a case arising. Land which is the property of an agricultural society is used chiefly for that purpose. Even if it were leased for tin hare racing I do not see that that would bring the society within the category of a trading concern and thus render it liable to pay tax.
– I do not know whether the committe should agree to the exemption of golf clubs.
– Certainly it should.
– Senator Thomas is in agreement with this provision because he is a golfer. In close proximity to all big cities large areas of land are held by golf clubs in a most exclusive way, although not for the pecuniary benefit of their members. Invariably these golf courses are situated in/ the centre of thickly populated residential areas and are of very great value. It may be a good thing to have such areas kept as breathing spaces ; but if they were available for building purposes the problem of securing a residence within easy distance of the city would largely be overcome. The Rose Bay golf course is one of the most beautiful in Australia and covers a very large area of land.-
– The club has made it what it is ; it was formerly a Chinaman’s garden.
– Those who have bought and improved land in the. vicinity are obliged to pay taxation upon that land. The members of the Rose Bay golf club are possessed of sufficient wealth to purchase and maintain that land for their own enjoyment. I do not consider that any body should be permitted to reserve solely for the use of its members such a large area of extremely valuable land, without being asked to contribute something towards the revenue of the country. I cannot conceive what is behind this proposal. Those who make their living from the land are compelled to pay taxation.
– These people are not making their living from this land.
– They are holding it out of use; it is not accessible to the general public. They are not putting it to any productive purpose. It is not fair that they should be exempt from taxation in respect of it. I should like the Minister to explain why this and similar areas are to be exempt from taxation.
– I remember the land which is now the property of the Rose Bay golf club when it was a Chinaman’s garden. The club purchased it when no one else would touch it, because it was such a filthy piece of land. It has been made one of the most picturesque spots in Australia by the expenditure of thousands of pounds.
– Did the Chinaman have to pay taxation on it?
– The Chinaman deserted it, and those who owned it accepted the highest price that was offering for it.
– I have been told that the Chinaman was driven off it.
– No one but a Scotchman could drive a Chinaman off his land. Chinamen, we are told, are not able to make a living in Aberdeen. This club has made its course a perfect Garden of Eden. The land which it did not require it sold as building sites, and a good class of houses is now erected on it. It is the finest example of enterprise that I have witnessed for many years. We should defend those who do well by their country. These men have advanced the interests of Rose Bay. This golf link and others I could mention are a credit to Australia. The people who established the Concord golf links bought the whole of the estate, which a few years ago was covered with scrub, sold the land that was high enough for the erection of houses, kept the low-lying parts for golf links, and so beautified them that they are now a credit to Australia. We hear men speaking about the need for open spaces in Sydney. These golf links provide open spaces in the suburbs of Sydney, and I hope that those who are providing them will be encouraged in what they have done.
– Where a body of men are so public spirited that they hold land for the desirable purpose of encouraging athletics and sport which are so dear to Australians, and no for pecuniary profit to themselves, it is only fair that the legislature should encourage them by not imposing taxation on such land. The Victorian Land Tax Act exempts land held in this way. The Commonwealth Government considers it most desirable to encourage the creation of sports grounds in every community, thereby providing open spaces which not only beautify a locality, but also provide fresh air for the people living close by. The fact that there may be exclusive control of some of these grounds does not come into the question. Football leagues have been clamouring for this concession, and, as honorable senators know, these leagues serve a very useful purpose in the community.
– What about tin hare racing?
– That falls into a different category, for no doubt it is conducted for pecuniary profit.
– I shall support the clause as it stands, on two grounds - in the first place, because I think we should encourage as much as possible the provision of these lungs, especially in a place like Sydney, which is lacking in them; and secondly, for the sake of encouraging athletics. I asked an authority whether he considered golf to he a form of athletics, and from his remarks I am not quite sure that it may not he regarded as a game of chance of the most pronounced type. But be that as it may, I know of instances in which a. great deal of money and personal effort has been devoted to the improvement of areas without the least chance of securing any pecuniary reward, and, indeed, at a great deal of expense to the persons concerned in effecting these improvements. Where we find public-spirited men or clubs doing that sort of thing I do not think that they should be asked to share in that cloud of taxation which is gradually settling down over this unfortunate country. For the purpose of preserving these broad spaces which are now to be exempt from land taxation, it is my intention to support the clause as it stands.
.- I agree that the Government is doing the right thing in exempting land held by sporting clubs, of the class described. Although there may be, as there always is, in connexion with matters of this sort, a horrible example or two, taking it by and large, the exemption of lands held by these sporting bodies is all fo* the good. I want to ask the Government whether it will be prepared to exempt another class of land, and the request- that I make is sufficient to warrant its serious consideration, because it is intimately associated with land settlement of a kind which, in my judgment, is best suited to link up with a really vigorous migration policy. I want, the Government to consider whether it will accept an amendment allowing for the exemption of -
All land which, to tlie satisfaction of the Commissioner in any one year, has been effectively used for share farming.
I have had a fair experience on the land, and some practical experience of sharefarming from both aspects, and I know of nothing better calculated to develop agriculture, particularly in its migration aspect, than share farming. The policy of resuming large estates, cutting them up into small areas, settling people upon them and financing these people, is almost a policy of despair, because it involves the country in an enormous capital expenditure, and very often leads to tragic failure. That has been evidenced over and over again in connexion with soldier settlements. Share farming is in a different class altogether. It ensures that the man who owns the land is deeply interested in the success of the man he puts lon it as a share farmer. He is there to stand by that man and assist him with advice and help in every way. I know of scores of instances in which men who are in comfortable circumstances to-day and own their own farms, started in the first instance as share farmers. Commencing in that way they gained experience and that sense of responsibility which is in many cases entirely lacking when a man finds himself thrust on to a farm with all the money ‘found for him. Share farming is one of those things which more than anything else tend to rapid agricultural development. The real objective of the Labour party in putting a tax on land was that land might be forced into productive use. The Labour party objected, possibly with some justification, to the retention of large and valuable estates, very often in close proximity to a railway, which men were not prepared to put to its best use. I am inclined to think that if the Government could see its way to accept the amendment I am suggesting, a considerable impetus would-be given to a system of share farming which, I think, could be linked up in a very definite way with the migration policy of the Government.
– We should need a very clear definition of share farming.
– I think that those difficulties could easily be overcome.
– What has the honorable senator in mind as a definition of share farming?
– The placing of new or old tenants on land who would get at least one-third of the total profit of ‘the farming from their efforts.
– Would they need to share 50 per cent, of the producing costs?
– It would all depend on the class of operation. Regulations could easily specify the different classes of share farming. For instance, the conditions of share farming in dairying differ from those in wheat farming or potato growing.
– Would the honorable senator limit the area in each case?
– Would the honorable senator call it share farming if an area of 50,000 acres was let out obviously for the purpose of avoiding taxation?
– No. Subdivision for the purposes of share farming would have to be such as . would satisfy the Minister.
– A father and sons might divide a property for the purpose of avoiding taxation. That is where there would be danger.
– I am not prepared to answer all these things on the spur of the moment. All I say is that these difficulties could be overcome. My main purpose is to prevent land which is effectively and efficiently used for sharefarming from being mulcted in heavy taxation in the same way as land which is not used in that way. I believe that if this exemption were made it would lead to a big agricultural development. I am satisfied that there are quite a number of land-owners who, if they were given encouragement in this way, would be willing to subdivide their land for share farming purposes. I am aware that there are some persons who hold very strong prejudices against share farming, but from my experience I believe that it is one of the very best means we can use to put men on their feet. If we are dealing with men who have comparatively little to spend it is better to encourage them to take up share farming in the first instance and get a start in that way, than to subdivide big estates, and spend a tremendous amount of money in making advances to them. In many instances such efforts have ended in disaster. I do not wish at this stage to move my amendment, but I hope the Government will give it serious consideration and see if it is not possible to do something on the lines I have suggested. The result would be extremely beneficial to the Commonwealth, because the system could be made an effective means of assisting the immigration policy.
– I have pleasure in supporting the proposal of Senator Greene, which I consider is a very valuable contribution to the debate. Share farming gave to France one of the finest systems of land tenure in the world. The rural population of that country is an example to other countries. I do not think that there would be any great difficulty about the definition of “ share farming.” Probably no one other than a State authority would be concerned with that definition. I feel sure that the Commissioner of Taxation would not allow anything to be classed as share farming, and thereby gain the benefit of an exemption, unless it could prove its title to be so considered. The Commissioner and his officers would be extremely careful in dealing with share farmers, because they would know that every case adjudged to be share farming would mean a loss of taxation. Honorable senators need not fear that in those circumstances there would be any considerable evasion of taxation. In mining circles we have what is known as a system of tributes. In several of the States, particularly in Western Australia, regulations have been adopted in relation to tributes on mines. The principle is much the same in share farming. If the suggestion of Senator Greene is given effect to - which I hope will be the case - it will be for the States so to amend their acts and regulations that there can be no doubt as to the right of any person to be regarded as a share farmer. It may be contended that the adoption of the honorable senator’s suggestion would mean the loss of a certain amount of revenue from direct taxation. I am content to believe that that would be the’ case, but I am of the opinion that if the productivity of this country could be increased, as I believe it would be if the suggestion were adopted, we could well afford to lose the small amount of direct taxation involved. I feel sure that after a few years any objections which the Commissioner of Taxation might now have to the suggestion would disappear, because the effect of the exemption would be to provide him with additional taxpayers and greater revenue. I hope, therefore, that the Government will agree to accept the suggestion of Senator
Greene. His proposal emphasizes the undesirability of the Federal Commonwealth being concerned with land tax at all. If, however, the Commonwealth is to remain in the field of land taxation, the tax should be imposed in a way which will not retard the country’s progress. The Federal Land Tax has not had the effect hoped for when it was introduced. In my opinion the development of the share farming system would do more to break up big estates than would any system of land taxation.
– No amendment such as that suggested by Senator Greene is necessary to permit of share farming.
– That is so; but his proposal if adopted, would have the effect of inducing property holders to let their farms on shares to a greater extent than is now the case with beneficial results to Australia.
– The honorable senator knows that in western and southwestern New South Wales share farming is extensively practised.
– I am aware of that, but even so, share farming is not carried on to a sufficient extent. If we can by this means induce the owners of large properties to put their land to better use - something which the Federal Land Tax does not do - we shall have increased production and give further employment, with the result that any loss on direct taxation will be more than compensated for. If Senator Greene moves the amendment he has foreshadowed I shall support it.
– Until something definite is before the committee it is difficult to know how to deal with the suggestion of Senator. Greene. The present federal land tax exempts from taxation property of an unimproved value of less than £5,000. It is, therefore, evident that a person to be taxable under that act must be in possession of land and improvements to the value of at least £8,000. In that case no comparatively poor man in Australia is called upon to pay the tax. Senator Kingsmill said that by encouraging a system of share farming, in the way proposed by Senator Greene, better results would be obtained than is now the case. Those of us who were primarily responsible for the federal land tax claim that it has done much to bring about the subdivision of big estates.
– Will the honorable senator name two or three estates which have been subdivided as a result of the tax?
– I do not intend to particularize; but throughout Australia large numbers of estates have been subdivided since the imposition of the tax. It is significant that land of an unimproved value of £117,000,000 which was taxable when the tax was first imposed, now yields no land tax. No owner of a large estate would be anxious to let his land to others on the share-farming system unless he believed that the result would be more profitable to himself.
– If it were more profitable, he would have to pay more income tax.
– The share farmer would earn the additional income for him. In years gone by there was as much sweating of agricultural labourers as there was of workmen engaged in any other industry. The result was that the demand for land throughout Australia became so keen that those who were landless were prepared to farm it on shares in order to get it. Throughout Australia there is still a great land hunger. For every good block of land made available, even if only on the share farming basis, there are large numbers of applicants. I have known of instances in which all the members of the share-farmer’s family had worked hard throughout the year only to find at its close that their combined efforts had not produced an income as great., as that which the head of the family alone would have earned in other spheres. How could we define “ share farming “ in this bill. Senator Greene said that at least one third of the returns from a farm should go to the share farmer. I take it that he favours the balance being paid to the owner of the land who has done nothing with it. The honorable senator said that the owner of the land would assist the share farmer. That is possible, but he would do so only because he would find it more profitable than to employ labour on the conditions set out in Arbitration court awards. According to Senator Greene, one-third of the returns should be paid to the man who does all the work and two-thirds should go to the man who does little or nothing to earn it.
– It would depend entirely on circumstances.
– I am not enthusiastic about the share-farming system, I want every primary producer to own his own land and to reap the full reward of his labour. In the event of a loss, the share-farmer and not the owner of the land would have to bear it.
– If the sharefarmer, instead of working the land on shares, owned it, would he not make a loss in a bad season?
– In a bad season, with two-thirds of the return belonging to the owner of the land, there would not be much left for theshare-farmer, whereas if he owned the land he would get the whole ofthe return, even though it was small. It has been said that some landowners, rather than work the land themselves, let it to share-farmers and merely visit it occasionally. .
-What does it matter so long as both parties are doing well out of the arrangement?
– Share-farming gives a greater return to the owner of the land than to the man who does the work. Something of a more concrete nature should be before the committee. Up to the present Senator Greene has not submitted a definite proposal. He believes that the system of share-farming will achieve better results from the point of view of’ land settlement than the resumption of land, and better even than the operation of the land tax. I favour a system of land taxation with the exemption I have named. The governments of the different States have various schemes for land settlement which have, been exhaustively examined by expert officials; but, unfortunately, owing to the present financial stringency, they have not been able to proceed with them. Under an agreement betweenthe Commonwealth and the British Government, the sum of £34,000,000 will be ear-marked for various developmental schemes in Australia.
The CHAIRMAN (Senator Plain).Order ! The honorable senator must confine his remarks to the clause before the committee..
– I am endeavouring to state my case in answer to the suggestion of Senator Greene that sharefarming would do more than anything else to attract migrants to Australia, and, therefore lead to an increase in population.
– That is not what I said. ,
-Well, that was the impression which I gained from the honorable senator’s remarks. I hope that the Government will not seriously entertain a proposal that is more or less in the air. No doubt it finds favour with a certain section of land-owners, who, perhaps, desire now to retire to one or other of the capital cities of the Commonwealth, and hope still to enjoy revenue from their respective holdings by making them available to share-farmers. The adoption of this system in any case is due to the land hunger that is prevalent throughout the Commonwealth. Those who work under this system only do so because they are unable to get land for themselves.
– They may not have the necessary capital to take up land for themselves.
– A man without capital is handicapped in any line of business. Some of those who have recently taken up the necessary land have lacked both experience and capital, and some of the failures that have been recorded have been due to the fact that unsuitable land has been made available. In addition to this we must remember that the market price of certain commodities fluctuates to such an extent that frequently a farmer finds himself in difficulties and unable to meet his obligations. I am not at all enthusiastic about the system of share-farming, because under it, sweating of the worst possible kind in some cases is practised upon men, women, and children who are obliged to work inordinately long hours for an inadequate return.
– Farming on the share system has worked to the. advantage of many people.
– And it has worked to the disadvantage of a great number.
– I desire to intimate to honorable, senators thatI have allowed considerable latitude in the discussion of this clause. I understood that’ Senator Greene intended to concludehis speech by submitting an amendment relating to share-farming, otherwise I should not have allowed him to cover such a wide range in the course of his remarks. I felt that having allowed the honorable senator so much latitude it would not be right to limit other honorable senators; but the discussion has developed into a general consideration of the share- system of farming, and is quite irregular. If honorable senators wish to debate that subject further, an amendment relating to the exemption of share-farming as originally suggested should be submitted.
– In order to meet your objection, Mr. Chairman, and so that the discussion may be in order, I move -
That after paragraph (h) the following new paragraph be inserted: -
all land which to the satisfaction of the commissioner in any one year has been effectively used for sharefarming (as may be prescribed).
– I have listened with a good deal of interest to the discussion on the amendment suggested and now submitted by Senator Greene. Perhaps I am. to some extent to blamefor the irregularity of the debate, because I did not earlier indicate the attitude of the Government towards the proposal. The consideration of the merits of share-farming might very well engage the attention of the Senate in a discussion of a measure relating to land taxation. Senator Findlev has given us the benefit of his views. There is, however, another side. Share-farming has enabled many men to get on their feet and finally to acquire the freehold of a considerable amount of property. The Government cannot accept the amendment moved by Senator Greene. The Commissioner of Taxation has already considered the proposal from a somewhat wider angle. Mr. Prowse, a member of another place, sought to include in the bill when it was being discussed elsewhere a provision to exempt from the land tax all lands used for agricultural purposes. So impressed was the Government with the suggestion that the Treasurer promised to have inquiries made before the measure was dealt with by this chamber. Accordingly the deputy commissioners were invited to express their opinion on the suggestion, and also its probable effect on the revenue. They have reported that it would be difficult to administer the provision, and that, if adopted, it would result in a loss of £300,000 per annum. Something has been said about the de-, sirability of putting land to its best use. I know of no class of men in the community who are better able to judge when they are getting a full return from land than the owners of it. There is a good deal of misapprehension amongst certain people on this subject. Apparently many people think, when they see sheep grazing on a property, that it would be put to much better use if it were ploughed and cultivated. I have had some personal experience, and perhaps I speak with some feeling on this subject. The prospect, I admit, is very alluring to a land-owner who thinks that by letting his property out on the share system he can get his work done for nothing and still enjoy a substantial return. As a matter of fact, under present conditions a considerable area of land that is now let on the share system for cultivation would give a much better return if it were judiciously and properly handled as a grazing proposition. Because of the difficulties in administration mentioned by the officers of the department, the Government was reluctantly obliged to reject the proposition made by Mr. Prowse in another place, and I now reluctantly oppose the amendment submitted by Senator Greene.
– The proposal submitted by Senator Green has much to recommend it, because share-farming under proper administration is likely to result in closer settlement and increased production. All who have had experience in this system of farming, either on the mainland or in Tasmania, know that it has given to industrious men without capital an opportunity to make a start. It has, undoubtedly, been the means of placing thousands of men on the land as successful farmers. I can, however, see many difficulties that would arise from the adoption of this amendment. The principal, in my judgment, would be with regard to the definition of sharefarming. How would the Commissioner determine what land should really come within the scope of the amendment It could be narrowed down to such an extent that it would be exceedingly difficult to say who was and who was not a share-farmer. The owner of a property whose sons usually worked on the farm could so arrange his business that his sons would be taken in as share-farmers, and although the sons were carrying out their work in the ordinary way the farmer would be exempt from a certain amount of taxation. I do not suggest that they would not be bona fide sharefarmers, but I mention the possibility to indicate a direction in which taxation could be avoided by those who so desired.
– It is better for a farmer’s son to be working under the share system than for nothing, as some do.
– A farmer does his best for his boys. Generally speaking I think it is the wish, of every farmer to settle his sons upon the / land if they so desire. If we wish to encourage migrants and city dwellers to reside in the country every possible facility should be provided for land-seekers. Each State has its land settlement schemes, and has legislation under which it can compulsorily acquire property suitable for closer settlement. The terms under which such lands are made available are very liberal, and provide for the land to be leased for a period, after which the freehold can bc acquired. In many cases properties, the unimproved value of which exceed £5,000, are subdivided in order to obtain the benefit of the exemption provided under the Federal Land Tax. Every encouragement should be given to share-farming, which at present is extensively carried on in almost, every part of Australia. The system provides a means for men with small capital to engage in rural pursuits - men who are frequently unable to obtain sufficient capital to start farm ing on their own account. I was reared on a farm and have been associated with farming pursuits sufficiently long to realize that it would be exceedingly difficult to give effect to the amendment moved by Senator Greene. During debates in this chamber frequent reference has been made to the small area of suitable land’ available to settlers. I have, however, no hesitation in saying that we still have in Australia, convenient to railways and roads, large areas still awaiting settlement. No better land is available in any other part of the world. Senator Findley spoke of the manner in which share-farmers are sweated, but I do not think that such conditions exist in many parts of Australia. There are some who have undertaken pioneering work, and in blazing the trail in the outback country have made the way easier, for those who come after them. Some honorable senators opposite seem to think that a man in possession of a well-improved property has no right to own it unless ho is most heavily taxed ; they seem to forget that he has spent the best years of his life in developing it. In these circumstances surely he is entitled to some consideration. There are large tracts of country adjacent to railways and roads which are available for settlement, but which cannot be obtained at the price which they were offered a few years ago, because railways, roads, telephones and other services have been provided. Reference has been made to the necessity of subdividing large estates in order to increase our wheat production ; but there are large tracts of country which are more suitable for the production of wool. The returns from the wool we export assist largely to ensure our financial stability. As the framers of the Constitution intended that land tax should be imposed by the Federal Government only in the event of national emergency, the Government should now vacate that field of taxation. Notwithstanding the difficulties I have mentioned the amendment has sufficient merit to justify me in supporting it.
– Senator Herbert Hays is apparently under the impression that honorable senators on this side of the chamber wish to assist in depriving farmers of their properties. That is not so. The amendment moved by Senator Greene has been submitted with the intention of giving the large land-holders an opportunity to escape payment of portion of their land tax. Even if it were adopted I do not think any more land would be brought under cultivation. Reference has been made to the share-farming system, concerning which I know something.
– Has the honorable senator ever tried it?
– No; but I have known others who have done so. Between Hallett and Uooloo in the middle north of South Australia, a large tract of country was owned by a person named Melrose, who say an opportunity of having it developed under the sharefarming system. He advertised for sharefarmers to work the land, for which they were to receive one-third of the returns. The land-owner supplied the land and the seed wheat, while the share-farmer had to provide the farming implements, horses, labour and everything required to till the soil. These share-farmers worked for three years, but eventually, when they=gave up, they were little better off than when they commenced. I was in the vicinity at the time and know the actual returns they received.
– Did the owner of the land derive any benefit?
– He was the only one who did. The men who did all the work got very little, whilst the land-owner increased his bank account to the extent of many thousands of pounds.
– If “the landowner made so much the share-farmers must have benefitted.
– Yes; but the benefit they secured was not comparable with that gained by the owner. They had to provide the implements, horses and labour and work very hard, whilst the landowners did practically nothing. I remind Senator Herbert Hays, who said that there was ample land available in Australia for genuine farmers, that at Albury, in March, 1925, there were 1,900 applicants for 98 blocks, and at Lake Cowra 413 persons applied for one block. At Grafton, in August, 1927, 2,200 land seekers applied for three blocks, and at
Moree, in September, 1925, there were 1,205 applicants for one block. Two years later, 1,070 persons applied for five homestead farms, and 129 for one Crown lease.
– That does not prove that the land then offered was the only land available.
– It proves that there were hundreds of applicants for a very few blocks. Victoria is not the only State that has experienced a shortage of land.
SenatorMillen. - The facts mentioned by the honorable senator are an indictation not of a shortage of land but of speculation.
– Then there must be many speculators. I do not know whether the honorable senator is well acquainted with South Australia, but he must realize the value of closer settlement to that State. The policy of the Labour party is not to take people off the land, but to place a greater number on it. There is no necessity for me to recite what the Labour party did in 1910 with the object of placing more people on the land. I would remind the Senate however that in the first three years of the operation of the Land Tax imposed by our party, £30,000,000 worth of land was subdivided. Since the inception of this legislation, as shown by the tenth report of the Commissioner of Taxation, approximately £100,000,000 worth of land has passed from taxpayers to non-taxpayers. That means that estates of an unimproved value of £5000 and over have been subdivided, to this extent, into holdings of a less value. In a certain district in Victoria four brothers held 400 acres of land, on which they were able to run nearly one sheep to the acre. Adjoining their block was an area of 30,000 acres, which was held by . a squatter, and on which he was running only one sheep to every four acres. It will thus be seen that closer settlement leads to the running of a greater number of sheep to a given acre. That also has been the experience in South Australia.
– The honorable senator surely does not mean to say that land which is adjacent to good land is necessarily capable of carrying the same number of sheep?
– Certainly. Those who take up comparatively small blocks engage in mixed farming, and are thus enabled to carry proportionately more sheep. I could mention ‘areas in South Australia that were formerly big sheep stations, but are now carrying a greater number of sheep, and, in addition, producing thousands of bushels of wheat. That is an indisputable fact.
– Many successful wheat-growers to-day are not running sheep on their properties.
– If the honorable senator is referring to the whole of Australia, his statement is incorrect. Almost every farmer in Australia who has the necessary room is carrying sheep as well as growing wheat, because it pays him to do so. I am constantly being brought into contact with these men in our State, and years ago I myself engaged in dairy farming. I know that the conditions under which share farmers work are closely akin to slavery. They are employed with only short breaks from Monday morning to Saturday night, and they get a very small return for their labours. I cannot see any necessity for Senator Greene’s amendment. It will not have the effect of placing more men on the land, but, on the other hand, it will enable the big land-owner to dodge his responsibility
– I cannot allow to pass unchallenged one of the arguments that has been used against the amendment. It would appear that the taxation authorities were asked to report upon what would be the financial effect of the proposal advanced in another place by the honorable member for Forrest (Mr. Prowse). The estimated loss was £300,000. It must be remembered that that estimate was not confined to land used for share-farming purposes, but, oh the contrary, embraced all agricultural land. That is a very different matter.
– Can a distinction be made between the two classes of land-holders?
– Very easily.
– Would the honorable senator levy taxation upon land that is worked by the owner himself, and exempt the other class of land?
– The Honorary Minister does not pay the taxation officials a very high compliment if he thinks that they are likely to be taken in by any pretext of that kind. Those gentlemen are exceedingly keen under normal circumstances, but their keenness is increased tenfold when the circumstances are abnormal. If the exemption were applied only to land that is subjected to effective share-farming, I doubt whether the loss would be £30,000.
– What does the honorable senator call share-farming?
– -I shall cite an instance which is within my experience in the State of ‘Western Australia. It has some bearing on the case which was cited by Senator Hoare. In the southwestern portion of that State, which is not the most suitable for wheat-growing, the owner provides the land, the seed wheat, and the fertilizer ; while the sharefarmer provides the necessary plant for sowing and reaping the crop; and the profits are shared equally. It is not possible to lay -down an arbitrary rule in connexion with the division of the profits, because it depends entirely upon the circumstances of each case.
– I know of cases in which the share-farmer gets two-thirds.
– The conditions do not vary very greatly.
– I contend that they do ; those that are applicable to one district are not applicable to another.
– They vary only in detail.
– Exactly ; but the detail is everything, because it expresses the difference between classes of land and products. If this proposal should become law, the Taxation Department will have to decide whether the land is being effectively used for sharefarming. I know several men who have been engaged in share-farming for a number of years and have done very well out of it. In addition to the balance they have at the1 bank, they possess an extremely effective plant which enables them to work fairly large areas of land. There is another point which struck mc during Senator Hoa re’s speech. He cited instances in which hundreds of people had applied for one block of land and said that frequently there was a rush of applicants for two or three blocks. I trust I may be pardoned for suggesting to him that such a state of affairs teaches a very wholesome lesson. Let him advise all his friends to migrate to “Western Australia, where there is not only one man one vote, but also one man one agricultural block. Plenty of land is available, and it is suitable for growing wheat and other primary products. There is no difficulty in obtaining land if the people will seek it where it is situated. The principle of sharefarm;ing opens the way to a man to go on to si farm that is ready made for him. Senator Greene’s amendment appeals to me as an admirable one, and I intend to support it.
– _Tn order that the position may not be obscured, I shall again state the point that I made by way of interjection while Senator Kingsmill was speaking. If we exempt from taxation land that is worked under the share-fanning system, how can we logically refrain from exempting land that is cultivated by its owner? If we were to do that, the loss of revenue would amount to £300,000. I, for one, shall not support a proposal that is not carried to its logical conclusion. If the principle behind the amendment is that this land is not being put to its best use - a proposition with which I do not altogether agree - I” can see no logical reason for declining to exempt the whole of the land that is used for agricultural purposes, as was suggested in another place by the honorable member for Forrest (Mr. Prowse).
– I could understand an honorable senator proposing to exempt from taxation all lands that are used for agricultural purposes, but it is absurd to propose that we should give a concession to the man who works his land on the share-farming system and takes two-thirds of the profits, while at the same time we tax the man who employes labour and puts his land to its fullest use. I would not differentiate between land-owners in any part of Australia. I doubt whether this amendment can constitutionally be made. What a task it is proposed to set the Taxation Commissioner! He would have to increase his staff tremendously, so that they could visit every State and examine all farms worked on the share-farming system in order to prove to his satisfaction that that land was being put to its best use. I cannot seriously entertain a proposition of this kind. Would Senator Greene like the task of touring Australia together with experts and visiting every share-farm to see if it is being worked effectively?
– If I could not do the work without touring Australia I should eat my hat.
– I think it would be necessary to pay personal visits to each farm.
– I do not.
– The task might be easy enough to the honorable senator, but not to the Taxation Commissioner. The honorable senator’s definition of “ effective use “ might be different from that of the Commissioner. In any case such an ambiguity should not be left to the Commissioner. The honorable senator would penalize hard-working farmers who observe arbitration court awards and wages board determinations in the employment of labour - such men, for their own benefit, would put land to its best use - and give an advantage to themen who let their land to share-farmers and dodge arbitration court awards and wages board determinations. We are told that in some parts of the Commonwealth whole families, even the children, are engaged in share-farming in some districts. Inspectors of schools have called attention to the sweating that is indulged in in the dairying industry. They have told us that in some cases the children of dairy-farmers are so tired when they go to school that they fall asleep.
– That is the honorable senator’s indictment of dairyfarming.
– It is not my indictment ; it is what the school inspectors say. The Labour party does not want sweating in any industry. It wants to remove the conditions that bring about sweating in the dairying industry. It wants to make it possible for people who desire to go on the land to get land as owners, and not as tenants on the sharefarming system. Senator Millen has said that there were 2,200 applicants for three blocks in the Grafton district, was evidence not of land shortage, but of speculation. Surely the honorable senator would not contend that, if there were two or three thousand applicants for three jobs, the majority at least would not be genuine applicants for employment. Surely he does not contend that there were not large numbers of genuine, applicants for the land that was made available in the Grafton district. Apart from the injustice that would be done to legitimate farmers if we adopted the suggestion of Senator Greene, there is the loss of revenue that would be involved. It was explained in another place that, if an amendment moved by Mr. Prowse were adopted, it would mean a loss of £300,000 in revenue, and Senator Kingsmill has suggested that the adoption of Senator Greene’s amendment would mean a loss of £30,000 in revenue. 1 can give no support to a proposal that would deprive the Treasurer even of £30,000 in revenue, and at the same time penalize legitimate farmers while giving an incentive to the man who is not disposed to work his land as it should be worked. I arn sure the committee will not entertain the amendment seriously.
– In the discussion of my amendment a great deal has been said that is entirely foreign to it. My object in moving it was to point out that the encouragement of the larger owners of land who subdivide it and utilize it under share-farming conditions is worthy of the consideration of the Government. Notwithstanding all that has been said in regard to the “difficulties of administration, I think they could easily be surmounted. Returns have to be furnished in regard to the area of land under cultivation, and the areas occupied by people engaged in share farming could be checked up. But my principle object in moving the amendment was to direct the attention of the Government to what I believe is a practical way of assisting in its general scheme of migration and land settlement. I believe that every encouragement we can offer to the larger land-owners to subdivide their land for share-farming purposes would lead to the settlement of men with no capital and often with very little experience. That scheme is, I think, worthy of the earnest consideration of this Parliament. I can speak with a good deal of practical experience both as a share-farmer and a land-owner. I know what an inestimable advantage the share-farming system has been to thousands of people in this country who are to-day successful landowners, but who made a start by sharefarming. Of course there are horrible examples of grasping men who care nothing for those associated with them, but there are many scores of people who can bear testimony to the wonderful start in life share-farming has given them. Senator Hoare has spoken of men who have got nothing as a result of their labour, but the terms and conditions he mentioned were certainly far more rigid than those which usually obtain in sharefarming. Where a man finds the machinery and plant and the owner finds the land, the seed, and the fertilizer the usual practice is to share half and half. Where the owner finds everything but the labour the share-farmer usually gets a third. . I have no idea of pressing my amendment to a divisipn. My purpose in moving it was to draw attention to what I believe is a possible solution of one of the difficulties facing the Government in regard to carrying out its immigration policy - that of bringing people’ to Australia, and settling them on the land at a heavy capital expenditure. I am suggesting what I believe would be of immense assistance in carrying out a scheme of migration.. I am pleased that the debate has taken place and now, with the permission of the committee, I should like to withdraw my amendment.
Amendment by leave withdrawn.
Clause agreed to.
Clauses 10 and 11 agreed to.
Clause 12 (Triennial assessments and alterations of assessments) :
– The committee should pause before giving its imprimatur to this clause. It should try to realize the loss of revenue that will be involved by having triennial valuations. In another bill the Senate has already agreed to reduce the rate of the land tax by 10 per cent. The Honorary Minister, who moved the second-reading of that bill, said that there would be a corresponding loss in revenue as the result of that reduction, and I pointed out during the debate that an additional loss would be brought, about by the adoption of triennial valuations. I understand that in the first year it would be £80,000 and in the second year £160,000. In the third year, of course, the revaluation would take place, but in the two intervening years we should suffer a loss of £240,000. in addition to the general loss of revenue brought about by the reduction in the rate of the tax. In . moving the secondreading of this bill the Minister did nor advance any valid reason for a departure from a system which has been in operation for seventeen years. During ail those years the commissioner has had power to value land every year or every two years as he saw fit. The Minister did not say that there were not sufficient valuers to- do the work. We know that big areas of land adjacent to cities have been held and then sold at a great profit.. The value of land held in that way may increase considerably in the three years between valuations. Yet not a penny additional tax will be derived from it. In every way we look at this clause we see that the revenue will suffer if it be agreed to. Clause 12 provides for retrospective assessments. At present the Commissioner may go back for two years in reassessing the value of land, whereas in the case of incomes he may go back for three years. It is now proposed to take away that power so far as land tax assessments are concerned. The power of retrospective assessments vested in the Commissioner may enable him to detect attempted evasions of tax. That power will no longer exist if this clause is agreed to. The more I study this clause., the more reasons I discover for voting against it. I shall not support any clause which will reduce the revenue by relieving from taxaton people who can well afford to pay it. When we consider the large amount of revenue derived from the taxation of in comes from personal exertion, and compare it with the, amount received from land taxation, it is evident that to reduce land taxation, particularly in a time of financial stringency such as the present, is a wrong policy to pursue. I shall therefore oppose the clause.
– There seems to be some misunderstanding as to the effect of these proposals. Triennial valuations are now made; but, unfortunately, they do not synchronize over the whole of the Commonwealth. It is impossible to administer the . existing legislation without creating considerable irritation amongst taxpayers unless some fixed period, such as that outlined in the bill, is adopted. It is now proposed to adopt a triennial period of valuation commencing from the 1st July, 1927. An assessment, when made, will remain in force for three years. Clause 12 proposes two amendments to the principal act. The proposed new section 20 (4) which reads -
Whenever therehas been a changeof ownership of the whole or part of an area of land or of an interest in an area of land, the Commissioner may, for the purpose of the assessments of the remaining years comprising the triennial period during which the change of ownership took place, cause the value of the area or interest or of the respective parts into which it has been divided to be altered was thought necessary in the interests of the revenue. The proposed new section 21 provides for the. alteration of assessments. While it is true that income-tax assessments may be altered, I point out that incomes vary each year, whereas there should not -be much fluctuation in land values during a period of three years.
– But there is.
– Even so, I point out that those fluctuations operate both ways. When land values are rising the Commissioner may lose revenue; but when land values are falling - and that is not impossible in Australia - the Commissioner will benefit. Triennial periods of land valuation are not new to Australia. They have been in operation in South Australia since 1884, and I believe also in some of the other States.
– The Minister has not convinced me that the proposed alteration in relation to valuations is sound. He says that in some parts of Australia there are triennial periods of valuation, whereas in other parts, valuations are made biennially. He argues that it is desirable that there should be a uniform period throughout the Commonwealth. That, however, is not a sufficient reason for altering the existing legislation to provide for triennial valuations. This clause is clear that the. triennial period of alua- tion shall date from 1st July, 1927. Let us suppose that during the first period of three years many sales of land take place and that the. price of land has gradually risen. Will the Commissioner of Taxation cause the land to be valued each time a sale takes place, or will he call upon the new owners of the land to pay taxation on the increased price paid for it?
– The honorable senator should read proposed new section 20 (4).
– The proposed new sub-section provides that the Com-‘ missioner may “cause the value of . the area or interest or of the respective part into which it has been divided to be altered.” It is true that the Commissioner may do these things, but I should like to know whether he will do them. Is it proposed to follow that course?
– If not, why is it put in the clause?
– If it is put there for that purpose, why provide for a triennial period? More work will be entailed in making the new assessment and in recording changes of ownership, particularly in respect of city and suburban land, than would be the case with an annual or biennial valuation. Recently a block of land in Melbourne was sold for £200,000. Would the purchaser have to pay tax on that amount? The Minister may say that the price paid for the land will be taken into consideration by the department’s valuers when making future assessments. If that course is followed, I have no objection to the clause.
– How can any person value land in a city except by comparing it with prices obtained for adjacent land?
– Some lands have not changed hands for many years:
– But other land in the same neighborhood may have been sold.
– I have no doubt that the value of Cole’s Book Arcade, Melbourne, for taxation purposes, was very much lower than the price actually received. I go further and say that other land in Collins-street, Melbourne, adjacent to Cole’s Book Arcade, is also assessed at a lower price per foot than that obtained at the sale. I am not yet satisfied: that taxation is being paid on the price* realized for land. It would be better forthe department to have annual valuations.. Land sales have been held in Melbournerecently, and at their conclusion premiums have been offered to purchasers; by persons anxious to obtain the land.’’’
– To meet cases like that, values would have to be re-assessed daily.
– I realize that the departmental officers are desirous of. obtaining as much revenue as they can.
– To do what the honorable senator suggests would necessitate a tremendous staff.
– That may be so, but it would pay the department to employ a big staff to get the true values, of land for taxation purposes.
– There are annual valuations in certain of the States.
– I am aware that it is the custom of municipalities to make annual valuations, but up to the present the Taxation Department has not adopted that system. The Government now wishes to extend the period and in future to have triennial valuations. To that I object very strongly, because it will, in my opinion, mean a serious loss of revenue.
.- The Minister in charge of the bill (Senator McLachlan) directed! attention to proposed new sub-section 4, which deals with a change of ownership. That does not meet my objection. Undoubtedly the system of triennial valuations will result in a loss of revenue from land which remains in the hands of one owner for a lengthy period. The Minister also stressed the point that land values fluctuate. That is what I have been emphasizing and that is why I am objecting to the proposed triennial valuations. The objectof all systems of land taxation should be to determine the real value of the land assessed. It is not desirable to impose taxation on fictitious values. Let me direct the attention of honorable senators to the provisions of section 20 of the principal act. Sub-section 1 reads -
The Commissioner may at any time make all such alterations in or additions to any assessment as he thinks necessary, in order to insure itsc ompleteness and accuracy, notwithstanding that land tax may have been paid in respect of the land included in the assessment:
Honorable senators should note those words. It provides that the Commissioner may at any time - not once every two or three years - make such alterations in the assessment as he thinks necessary to insure its completeness and accuracy. In other words, the purpose is to obtain justice in respect of all taxpayers, and to see that the revenue is not defrauded. The Minister has stated that the loss of reven ue due to the triennial valuations will be only £80,000. That estimate, I understand, has been furnished by the Treasurer, and from my knowledge of that honorable gentleman, I regard the figure as a very conservative one. It is ridiculous to suggest that the taxpayers who are to be relieved are not fairly well blessed with this world’s goods. They cannot be regarded as struggling taxpayers.
– They have to pay State land tax as well.
– I am aware of that, but that is no reason why they should escape legitimate taxation by the Commonwealth Government. I am not satisfied with the Minister’s reply, and I shall vote against the clause.
Question - That clause 12 stand as printed - put. The Committee divided.
Majority . . . . 12
Question so resolved in the affirmative.
Clause agreed to.
Clauses 13 to 16 agreed to.
Clause 17 -
Section 44 of the principal act is repealed, and the following sections inserted in its stead: - 44k. (4) A taxpayer who is dissatisfied with the decision of the Commissioner may within 30 days after the service by post of notice of that decision -
– I move -
That after the word “ objection,” the following words be inserted : “ on any grounds stated therein other than those upon which he objects to the value assigned to his land.
Under this bill the Government proposes to appoint a valuation board which, according to the Treasurer, will have on it a representative of the taxpayers. I presume valuation boards will consist of experts who have a full knowledge of land values, And that taxpayers will be represented on them. If the value of a pastoral area is under review, I presume a pastoralist will sit on the board. When the board has given its decision a taxpayer should not be allowed to appeal to the Supreme Court of a State or the High Court when only the value of the land is involved. The members of the board may not be fully familiar with the intricacies of the law, but should have a knowledge of the value of the land. A taxpayer dissatisfied with his assessment is to be allowed to appeal from the commissioner to the board, the decision of which in the matter of land values should be final. If the taxpayer is to be permitted to appeal from the board to the Supreme Court of a State or to the High Court, endless litigation may result, and the value of the board impaired.
– If the honorable senator will study the proposed new section he will see that sub-section 4 provides that a taxpayer who is dissatisfied with the decision of the commissioner may, within 30 days after the service by post of notice of that decision -
The word “ or “ is used between paragraphs a and b. At present a dissatisfied taxpayer can either appeal to the board or to the Supreme Court of a State or to the High Court; but the Leader of the Opposition is apparently under the impression that he may do both. There is, as I stated earlier, one stage at which a taxpayer has two strings to his bow, but in this instance he must take one of two courses. The reason for providing an alternative is obvious. When the value of broad acres or agricultural land with very few improvements is in dispute a taxpayer would promptly appeal to a valuation board, from which he would get a decision by men experienced in land values and productivity, but if legal technicalities were involved he would go to the Supreme Court of a State or to the High Court. Sub-section 6 of proposed new section 44l provides that -
The taxpayer may, within 30 days after the date of the board’s decision, request the commissioner, in writing, to treat’ his objection, so far as it relates to grounds not dealt with by the hoard, as an appeal and forward it to the High Court.
Numerous complications are likely to arise- in calculating a taxpayer’s interest in a primary or secondary industry. The difficulties such as would not be dealt with by a valuation board which, as its name indicates, will determine the value of land. To meet other cases these words are included - . . or, where the land dealt with in the assessment is situated wholly within one State, to the High Court or the Supreme Court of that State.
Sub-section 7 provides that -
The commissioner or taxpayer may, within 30 days after the date of the board’s decision, appeal to the High Court from any decision of the board under this section which, in the opinion of the High Court, involves a question of law, and the board shall refer to the High Court any question of law arising ‘before the board and the decision of the High Court thereon shall be final and conclusive.
That appears to meet the objection raised by the Leader of the Opposition. If a taxpayer is dissatisfied with the commissioner’s decision, he may go before the Valuation Board, or the Supreme Court of a State, or the High Court. If he goes to a Supreme Court or the High Court his appeal is finally dealt with. As a number of taxpayers would prefer ‘that their case be determined by a Valuation Board provision has been made in tr.at direction. There are constitutional dif Acuities in the way of clothing the board with judicial authority. V aluation boards are to be appointed to decide land values in’ dispute and legal questions are to be settled in the Supreme Court of a State vested with jurisdiction, or the High Court, which carries our jurisdiction.
– The Honorary Minister (Senator McLachlan) has not convinced me of the necessity for this clause. I have no desire to vest the board with judical authority, but I wish to make it the final authority in the matter of land values.
– I said that it is to be, except on questions of law, which may be referred to the court.
– There are numerous appeal boards associated with many industries in Australia which are the final arbiters in the matter of conditions and wages. The Honorary Minister said that only legal matters will be settled by the Supreme Court or High Court, and he quoted sub-section 6, in which these words appear in respect toa request to refer a case to the court, “ so far as it relates to grounds not dealt with by the board.” The grounds not dealt with by the board may include some phase of land valuation. I do not see any reason why the taxpayer should have to go to the Supreme Court or the High Court for a settlement of such cases. The law at present stipulates that two courts may be moved by a taxpayer, if he so chooses, after he has appealed to the commissioner. It is here proposed to set up another body, in which I should have the utmost faith; but its value will be nullified if appeals are allowed with respect to valuations to either the Supreme Court or the High Court. For that reason I press the amendment.
.- This provision is identical with one which appears in the Income Tax Assessment bill, to which the committee agreed last week. The effect of the amendment would be different from that which the honorable senator expects, and its adoption would only . cause further confusion.
Question - That the words proposed to be inserted be so inserted (Senator Needham’’s amendment) - put. The Committee divided.
Majority . . . . 12 .
Question so resolved in the negative.
Clause agreed to.
Clause 18 agreed to.
[10.40]. - In moving -
That the Senate do now adjourn,
I desire to state that the question of the provision and maintenance of a satisfactory steamer service between Tasmania and the mainland of Australia has been under the consideration of the Government for some time. We recognize that such a service must cater for the tourist traffic as well as provide an effective transport for mails and cargo. The Committee of Public Accounts has investigated these questions very thoroughly and presented a report which deals comprehensively with all phases of them. The Government has given very close consideration to the committee’s report and its recommendations with a view to improving the means of communication between Tasmania and the mainland.
The committee’s first recommendation was that the coasting trade sections of the Navigation Act should be repealed. Section 286 of the Navigation Act gives power to the Governor-General to permit of unlicensed ships of such size and speed as he may determine being exempted from theprovisions of the act, in order to cater for tourist traffic between the mainland and Tasmania; and the Governor-General, in December of last year, acting under the authority given by that section, issued a notice that unlicensed British ships of at least 15 knots were exempted from the provisions of the act. in so far as the carriage of passengers between Hobart and the ports of Brisbane, Sydney, and Melbourne was concerned, during the period from the 1st January to the 31st May, 1927. A similar course was followed in the previous year, the period covered by the exemption being from the 6th March to the 31st May, 1926. The Government is of opinion that the question of the effect of the coasting provisions of the Navigation Act on trade and commerce in Australia is too wide to be decided upon the issue of trade in a particular part of the Commonwealth. It is now giving consideration to this wider aspect of the question and at a later date will indicate its policy thereon.
The second recommendation of the committee was that the mail contract with tho Orient Steam Navigation Company should be amended to provide for an additional call at Hobart during the peak of the tourist season, when interstate passengers would be carried. The present contract with the Orient Company provides that the mail steamers on their homeward trip shall make at least three calls annually at Hobart- during the months of February to May inclusive. The Orient Company’s contract costs the Commonwealth £130,000 per annum, and to arrange for an additional call at Hobart as recommended by the committee would, it is anticipated, involve a very considerable increase in the subsidy. Very little additional return in the shape of freight’ or passenger traffic would be received by the company, and from a mail standpoint no- benefit would be gained by the public- of Tasmania. The Government is, therefore, of opinion that the advantages to be derived by Tasmania from an additional call by the Orient Company’s vessels would be in no wise commensurate with the additional cost involved, and that this increased expenditure would not be justified.
With reference to the recommendation of the committee concerning the service between Sydney and Hobart, it should bo pointed out that at the time the committee’s investigations were made a fortnightly service was in operation. Subsequently, however, a service of weekly frequency was inaugurated and it has been ascertained from the owners of the vessel now engaged in the service that it is their intention to maintain the weekly frequency up to tho end of March next, provided trade conditions continue to justify it. The Government considers that a service of weekly frequency should reasonably meet requirements, and that the heavy expense which would be involved in arranging for a more frequent service during the tourist season would not be justified under existing circumstances.
The committee’s recommendations in relation to the Bass Strait service. which are set out on pages 17, 18, 19 and 20 of the report, have been given very full consideration by the Government, as it realizes that this is the service which will carry the bulk of the traffic. The present contract, which carries a subsidy of £30,000 per annum, and is terminable upon twelve months’ notice, covers two services, viz. : - Melbourne to Launceston, and Melbourne to Burnie. The Melbourne to Launceston service has a frequency of thrice weekly during the period from the 16th September to the 31st March, and twice weekly during the remainder of the year. The Melbourne to Burnie service is twice weekly, both in summer and winter. Under the contract the vessel on the Launceston service is required to maintain an average speed of 15 knots in average weather between Gellibrand Light- and Low Head, and the vessel on the Burnie service’ is required to maintain an average speed of 13 knots between Gellibrand Light, and Burnie. Each of the vessels used under the contract is a coal-burning vessel. The vessel on the Launceston service usually leaves Melbourne about 4 p.m., and that on the Burnie service at midday. Owing to the shallowness of the River Tamar, between Rosevears and Launceston, the time of the arrival of the- .steamer at Launceston is dependent on the condition of the tide. In winter it is also affected by fogs, which are very prevalent at that time of the year. The river from Low Head to a point about twelve miles from Launceston has, however, sufficient depth of water at all times for steamers such as those at present used in the service. So far as .the Launceston route is concerned, the committee considers that the service should continue as at present until better facilities for shipping are available in the River Tamar; but in regard to the Burnie route, a service of thrice weekly frequency in the summer and twice weekly in the winter is recommended. The Government is impressed with the desirability of improving the frequency of the Bass Strait’s service during the summer season, and of employing a more efficient and faster vessel on the Burnie route. It has also formed the opinion that a much-improved service could be given if the difficulty in connexion with the tides at Launceston were overcome by terminating the service at some point on the river near Rosevears, where there is deep water, provision being made for linking such point with the railway system of the State. It is accordingly proposed to invite tenders early in the new year for services as follow : -
Service No. 1 -
Route. - Between Melbourne (or Port Melbourne) and a point on the River Tamar near Rosevears, where there is deep water.
Frequencyof Service. - Thrice weekly in summer. Twice weekly in winter.
Speed of Vessels. - The average speed to be maintained by the vessels to be such as to enable the trip each way to be performed within sixteen hours.
Time-table. - Leave Melbourne, 5 p.m. ; arrive Tamar port. 9 a.m.; leave Tamar port 4 p.m., arrive Melbourne 8 a.m.
Service No. 2 -
Route. - Between Melbourne (or Port Melbourne) andBurnie-Devonport. Frequency. - Thrice weekly in summer.
Twice weekly in winter.
Speed of Vessel. - The average speed to be maintained by the vessel to bc such as to enable the trip each way to be performed in fourteen hours.
Time-table. - Leave Melbourne 4 p.m., arrive Burnie6 a.m.; leave Burnie 8 p.m., arrive Melbourne 10 a.m.
The Government does not propose to stipulate that oil-burning vessels shall be used on the service, but will give preference to tenders which contemplate the use ‘ of such vessels. It intends, however, to provide that the vessels used under the contract shall be suitable for passenger traffic and freight as well as for the conveyance of mails.
The committee expressed the opinion that the early inauguration of a subsidized aerial service between the mainland and Tasmania should be seriously considered with a view to its establishment as soon as efficient and suitable machines can be procured. In considering this question it must be remembered that the vessels conveying mails between the mainland and Tasmania travel the greater part of their journey during the night-time. Aeroplanes would have to travel in daylight, and the time-table would have to be arranged with due regard to the difficulties which occur from time to time on account of fogs during the winter. This proposal is to be further investigated with a view to obtaining the additional data which are neces sary before a decision as to the advisability of establishing the service can be reached.
– I am sure that we all listened with interest to the Government’s proposals in regard to obtaining and maintaining a better steamer service between Tasmania and the mainland, but I was particularly interested in hearing what the Government intended to do in regard to the repeal or suspension of the coasting provisions of the Navigation Act. These provisions have been suspended twice, but I do not think that on either occasion the number of tourists to the island State has been augmented. In my opinion, any attempt to suspend or repeal those provisions should claim the attention of Parliament. The matter is too important to be dealt with simply by making a statement such . as that which has just been made by the Leader of the Government in the Senate. If the Government had been wise in its day and generation, and had not decided to sell the Commonwealth Line of Steamers, the vessels of that Line might have been employed to provide a better steamship service between the mainland and Tasmania.
Question resolved in the affirmative.
Senate adjourned at 10.51 p.m.
Cite as: Australia, Senate, Debates, 13 December 1927, viewed 22 October 2017, <http://historichansard.net/senate/1927/19271213_senate_10_117/>.